99:fin/3504 - dbedt hawaii · web viewdavid y. ige. governor. state of hawaii. department of...

DAVID Y. IGEGOVERNOR

STATE OF HAWAIIDEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT & TOURISM

HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION677 QUEEN STREET, SUITE 300

HONOLULU, HAWAII 96813

FAX: (808) 587-0600

CRAIG K. HIRAIEXECUTIVE DIRECTOR

16:FIN/1068

April 1, 2016

To All Interested Parties:

SUBJECT: 2016 CONSOLIDATED APPLICATIONFINANCING PROGRAMS

The Hawaii Housing Finance and Development Corporation (the “HHFDC”) is pleased to present the 2016 Consolidated Application for HHFDC’s financing programs. Please complete this application packet if you are applying for financing from any of the following programs:

Dwelling Unit Revolving Fund (DURF)

Hula Mae Multi-Family (HMMF) Revenue Bond Program

Low Income Housing Tax Credit (LIHTC) Program

Rental Assistance Revolving Fund (RARF) Program (for Interim / Construction Financing)

Rental Housing Revolving Fund (RHRF) Project Award Program

Please review the “Instructions” and “Schedule of Important Dates” attachments for program descriptions and program deadlines. The “Schedule of Important Dates” is subject to change; please refer to the HHFDC website at www.hawaii.gov/dbedt/hhfdc for the most current information. The Consolidated Application is different from the prior year. As such, carefully review all requirements, schedules, and submittals.

FEESAll application fees shall be in the form of a cashier’s check and must be submitted with the completed application by the deadlines set forth herein. Cashier’s checks shall be made payable to the “Hawaii Housing Finance and Development Corporation”. (No personal checks will be accepted.)

Please note:

1) The HHFDC’s receipt of an application does not constitute acceptance of the application.

The HHFDC reserves the right to return an application to the applicant at any time

http://www.hawaii.gov/dbedt/hhfdc

To All Interested PartiesApril 1, 2016

without taking further action on the application due to, but not limited to, the following:

a. Failure to meet application submittal requirements (e.g., timeliness, correct application fees, cashier’s check, correct number of copies).

To All Interested PartiesApril 1, 2016Page 2

b. Failure to meet individual program criteria (e.g., income set-aside requirements, minimum periods of affordability, amount of tax credits requested per low income units).

c. Failure to disclose in the application any known material defects about the development of the project, any misrepresentation, or fraud.

d. Incomplete application. Applicant has 10 working days after date of written notification to correct application deficiencies. If the deficiencies are not corrected within 10 working days, the application will not be processed.

2) Awards are subject to the availability of funds and approval by the Governor of the State of Hawaii.

3) HHFDC does not discriminate against any person because of race, color, religion, sex, including gender identity or expression, sexual orientation, disability, familial status, ancestry, age, marital status, or HIV infection.

Some information regarding the specific financing programs and updated reference information may be found on the HHFDC website, www.hawaii.gov/dbedt/hhfdc.

Should you have questions regarding the DURF program, please contact the Development Branch at (808) 587-0529.

Should you have questions regarding the LIHTC, HMMF, RHRF, or RARF programs, please contact the Finance Branch at (808) 587-0567.

Applicants may schedule a meeting with the staff to review the application, no later than TWO WEEKS PRIOR to the indicated deadlines. Arrangements for a preliminary review of the application for LIHTC, HMMF, RHRF, and the RARF programs may be scheduled with Patrick Inouye at (808) 587-0797, Jocelyn Iwamasa at (808) 587-0576, or Dean Sakata at (808) 587-0575.

Thank you for your interest in the programs.

Sincerely,

HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION

Craig K. HiraiExecutive Director

DAVID Y. IGEGOVERNOR

STATE OF HAWAIIDEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT & TOURISM

HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION677 QUEEN STREET, SUITE 300

HONOLULU, HAWAII 96813

FAX: (808) 587-0600

CRAIG K. HIRAIEXECUTIVE DIRECTOR

16:FIN/1069

April 1, 2016

To All Interested Parties:

SUBJECT: 2016 CONSOLIDATED APPLICATION FINANCING PROGRAMS Solar Water Heating

Hawaii’s energy resources and physical environment must be managed and protected in a manner that ensures the health, safety, and welfare of the citizens of the State of Hawaii. An effective means of protecting our fragile environments is to use energy more efficiently and to increase the use of renewable energy resources. These goals are expressed in Chapter 226-18, Hawaii Revised Statutes.

Effective January 1, 1999, all plans and designs for new or renovated facilities using state funds or located on state land and incorporating the use of hot water and not utilizing a solar water heating system, shall include a comparative analysis to determine the cost-benefit of using a conventional water heating system or a solar water heating system. The analysis shall be based on the projected life-cycle costs to purchase and operate the water heating systems. If the life-cycle analysis is positive, the facilities shall incorporate solar water heating. If water heating entirely by solar is not effective, the analysis shall also evaluate the life-cycle, cost benefit of solar water heating for preheating water.

If you have any questions, please call Patrick Inouye at (808) 587-0797, Jocelyn Iwamasa at (808) 587-0576, or Dean Sakata at (808) 587-0575.

Sincerely,

Darren K. Ueki Finance Manager

STATE OF HAWAIIHawaii Housing Finance and Development Corporation

2016 Consolidated ApplicationSchedule of Important Events

Program Application Due Dates Award Dates

Availability of Funds(Subject to availability of

funds)

LIHTC – 9%(From State’s Annual Volume Cap)

June 15, 20162:00 PM

August/September 2016 Subject to the availability of State’s LIHTC volume cap.

LIHTC – 4%(with Private Activity Bond Allocation)

Open, applications accepted throughout

the year.

Depends on the date an application is received.

Subject to the issuance of a tax-exempt private activity bond.

RHRF FY2016(Funding Round 2)

June 15, 2016

2:00 PM

To Be Determined

Note: RHRF program requires the HHFDC

Board to adopt an approved and rejected list

prior to award.

Upon Governor’s approval and satisfactory completion of required documentation.

RHRF FY2017 (Funding Round 1)(Subject to availability of funds)

October 19, 2016

2:00 PM

RARF Open, applications accepted throughout

the year.



HMMF Open, applications accepted throughout

the year



DURF Open, applications accepted throughout

the year.



Applications available: April 1, 2016All dates are subject to change

STATE OF HAWAIIHawaii Housing Finance and Development Corporation

2016 Consolidated ApplicationFee Schedule

Program ApplicationFee

Loan/ Origination

Fee and Interest

AdministrativeFee

Compliance Monitoring

Fee

Low Income Housing Tax Credit

$1,500 n/a 10% of first year’s federal credit amount reserved (one-time)

$25 per unit per year for all project units excluding the manager unit(s)

Hula Mae Multi-Family

$500 n/a $50,000 payable at bond issuance (one-time) and 1/8% (.125%) of the permanent multi-family loan amount (annual administrative fee)

$35 per unit per year for all units excluding the manager unit(s)

Rental Assistance Revolving Fund

n/a Origination Fee:Minimum 1% of loan amount

Interest:Minimum 3% per annum

n/a To be determined

Rental Housing Revolving Fund

$500 Interest:Variable depending on project needs.

n/a $35 per unit per year for all units excluding manager unit(s)

Dwelling Unit Revolving Fund

$2,000 Origination Fee:Minimum 1% of loan amount

Interest:Minimum 3% per annum

Up to $2,500 per unit (one-time)

n/a

Consolidated Application April 1, 2016Page 1

STATE OF HAWAII

HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION

This application consists of a General Information Section and the applicable Program Section(s) which must be completed.

This application is to be used in applying for the following financing programs:

DWELLING UNIT REVOLVING FUND PROGRAM The revolving funds may be used to provide developers of for-sale housing with below market rate construction financing, particularly in mixed developments that include rental and special needs housing. For Sale projects using DURF shall be subject to the HHFDC’s Buy Back and Shared Appreciation Equity requirements.

In general, DURF funds have been used to provide interim construction loans for the development of affordable housing. The DURF program is administered by the Development Branch. Please contact the Development Branch at (808) 587-0529 for more details.

HULA MAE MULTI-FAMILY REVENUE BOND PROGRAMThe HMMF Program provides interim and permanent financing through the sale of tax-exempt revenue bonds for the development or rehabilitation of rental housing by private developers and owners. To qualify, projects must reserve at least 20% of their dwelling units for tenants whose incomes are 50% or less of the Area Median Gross Income (AMGI) or at least 40% of the units for tenants whose incomes are 60% or less of the AMGI. The developer/owner must agree to keep the project as an affordable rental for a minimum of 15 years. The HMMF program is administered by the Finance Branch of the HHFDC. Please contact the Finance Branch at (808) 587-0567 for more details.

LOW-INCOME HOUSING TAX CREDIT PROGRAMThe LIHTC Program is a financing tool for private developers and non-profit organizations to construct or rehabilitate affordable rental units. Under the program, federal and state tax credits are awarded by the HHFDC, and may be used to obtain a dollar for dollar reduction in income tax liability for 10 years or may be syndicated to generate project equity. To qualify, projects must reserve at least 20% of their dwelling units for tenants whose incomes are 50% or less of the AMGI or at least 40% of the units for tenants whose income are 60% or less of the AMGI. The developer/owner must agree to keep the project as an affordable rental for a minimum of 30 years. The LIHTC program is administered by the Finance Branch of the HHFDC. Please contact the Finance Branch at (808) 587-0567 for more details.


RENTAL ASSISTANCE REVOLVING FUND FOR INTERIM CONSTRUCTION FINANCINGThe RARF provides Interim Construction Financing at below market interest rates for the development of rental housing projects. Projects must meet one of the following requirements:

a) minimum of 20% of the units for families or households earning 50% or less of the AMGI level; or

b) minimum of 40% of the units for families or households earning 60% or less of the AMGI level; or

c) minimum of 60% of the units for families or households earning 140% or less of the AMGI level.

The RARF program is administered by the Finance Branch of the HHFDC. Please contact the Finance Branch at (808) 587-0567 for more details.

RENTAL HOUSING REVOLVING FUND PROGRAMThe RHRF provides equity-gap low-interest loans to qualified owners and developers providing affordable rental housing.

The RHRF Project Award has the following funding priorities (in order of priority):

a) Projects awarded tax credits or financing administered by the U.S. Department of Housing and Urban Development (HUD) or the U.S. Department of Agriculture (USDA) Rural Development (RD) maintaining a minimum of:

50% of the units for families or households earning 80% or less of the area median gross income, of which 5% of the units for families or households earning 30% or less of the area median gross income

and the remainder of the units for families or households earning 100% or less of the area median gross income.

b) Mixed income rental projects or units in a mixed-income rental project where all units are for persons and families with incomes below 140% area median gross income.

The RHRF program is administered by the Finance Branch of the HHFDC. Please contact the Finance Branch at (808) 587-0567 for more details.

The applicant is responsible to review the applicable federal/state laws as they relate to the respective financing programs to ensure compliance with current regulations.


INSTRUCTIONS

If you have any questions, please contact a member of the program staff at (808) 587-0567. Staff is available for consultation prior to each application deadline. Applicants may schedule a meeting with staff no later than two weeks prior to the indicated deadlines.

Applications must be complete in order to be accepted. Incomplete applications will not be processed by the program staff for review and decision making by the Hawaii Housing Finance and Development Corporation’s Board of Directors (Board).

The Consolidated Application is prepared in Microsoft Word and Excel. The Consolidated Application may be completed in Microsoft Word and Excel or a compatible program. If you are typing this application, please use, at minimum, an 11 point font.

Please submit the application in the following order:

1. Application Submission Sheet

2. Certifications and Assurances

3. Applicant Credit Information Authorization

4. Applicant Minimum Threshold Certification – LIHTC Applicants (includes Smoke Free and Public Housing Waitlist Certification)

5. Section I – General Information (includes Questions section)

6. Section II – Hula Mae Multi-Family Program Application (pages 1 - 2)

7. Section III – Low Income Housing Tax Credit Program Application (pages 1 - 10)

8. Financial Worksheets – Exhibits A-G (Excel Worksheets)

Exhibit A Project Cost Breakdown WorksheetExhibit A-1 Bond Issuance CostExhibit A-2 Rehabilitation Scope of WorkExhibit B Construction Cash FlowExhibit C Operating IncomeExhibit D Operating ExpensesExhibit E Operating ProformaExhibit F Tax Credit Worksheets:

Applicable Fraction Calculation Tax Credit Calculation Rehabilitation Threshold Test

Exhibit G Estimated Project RevenuesExhibit H Summary Sheet

9. Exhibits 1 - 39If certain exhibits are not applicable, then insert a page with the statement “THIS SECTION IS INTENTIONALLY OMITTED” typed on it, along with a brief explanation as to why that exhibit is not applicable.

Consolidated Application Instructions April 1, 2016Page 1

Exhibit 1 Copy of a current IRS Tax Exemption Letter (non profits) and copy of the Articles of Incorporation – include in original application only.

Exhibit 2 Most recent Treasury Form 990 with all supporting documentation, as filed with the IRS – include in original application only.

Exhibit 3 Certified copies of the organizational documents of the applicant, including its articles of incorporation and bylaws, declaration of trust, partnership or limited partnership agreement, including any amendments thereto. Include a signature resolution if not encompassed within corporation bylaws.

Exhibit 4 Copy of applicant’s past three (3) years of audited financial statements and reports prepared in accordance with generally accepted accounting principles. In the event the applicant is an entity not yet formed, submit federal and state tax returns and financial statements for the previous three years, for the developer and principals of the applicant entity – include in original application only.

Exhibit 5 Copy of an organizational chart for the sponsor and the owner of the project.If the ownership structure will be different at anytime during the development

process, provide a separate organizational chart representing the ownership structure at such time.

Exhibit 6 Certificate of Vendor Compliance for the applicant and constituent entities. The Certificate should not be more than 30 days old and the status of all line items shall be reported as compliant or exempt– include in original application only.

Exhibit 7 Trade and banking references for the applicant – include in original application only.

Exhibit 8 Housing Development Experience form provided as part of this application, if applicable. Please fill in all information requested on the sheet using the most current information.See sample form of Exhibit 8 in the application forms section.

Exhibit 9 Résumé for each member of the project team.Résumé for key staff involved in the development ownership of this project from the sponsor and developer.

In addition, please provide a list of construction projects and contracts completed by the Developer, General Contractor, Consultant, Project Sponsor, and Architect for at least the last five years. The list includes at minimum, the name of the project, address of the project, beginning and ending date of the contract or project, the year project was placed in service, name of owner of project, owner contact information and list of any federal, state or local subsidy used in the project and a brief description of the project.Letters of reference are welcome in addition to the résumés.

Exhibit 10 List of affordable housing projects managed by the management agent for the past five years. Include name of property, address of property, number of units, name of state, federal and local subsidy program in which the project is participating in, and the term of involvement and contact information for property owner.


Exhibit 11 Location map of the project site. The map should identify the site, parks, schools, public transit routes and stops, shopping and business districts, and competitive developments.

Exhibit 12 Photographs or renderings of the project and site.

Exhibit 13 Survey, if available.

Exhibit 14 Evidence of site control for the project, e.g., deed, lease, agreement of sale, option agreement.

Exhibit 15 Copy of any existing note, mortgage, or loan agreement encumbering the project site, if available.

Exhibit 16 Preliminary title report.

Exhibit 17 Documentation regarding the applicable Special Site Classification.

Exhibit 18 Letter from the appropriate County Housing Agency which describes your request for exemption under Chapter 201H, HRS, and the status of your application. If your site is being rezoned, please attach a letter from the appropriate County Planning Office which describes the status of the rezoning process.

Exhibit 19 Letter of support from the County mayor, City or County council, County Housing office or agency, or Neighborhood Board. Letter must not be older than 6 months from the date of application.

Exhibit 20 Copy of the most recent Draft Environmental Assessment, Finding of No Significant Impact or Environmental Impact Statement.

Exhibit 21 Utilities:

Water: Attach a copy of Board of Water Supply or Department of Water Supply letter confirming adequacy of existing water system and availability of water.

Sewer: Attach a copy of the sewer application indicating adequacy of existing sewer system capacity.

Electricity: Attach a copy of letter from local electricity provider confirming the availability of electricity to the site.

Exhibit 22 Environmental Questionnaire and copy of Phase 1 Environmental Site Assessment. Copy of Phase 2 Environmental Site Assessment and any mitigation plan, if necessary.

Exhibit 23 Proposed construction timetable.

Exhibit 24 Market analysis prepared by an independent firm, not affiliated with the developer (see below*), as to present and projected demand for the proposed development in the market area. Please refer to Appendix 1 of the Qualified Allocation Plan for Low Income Housing


Tax Credits. As the market analysis should provide up-to-date demographic information, it should be dated no earlier than six months from the date of the application.

*The firm conducting the study must provide the following documentation: a.) Certificate of Vendor Compliance within 30 days prior to the application date

indicating all checks as “compliant” or “exempt”, b.) evidence that conducting market studies is one of the primary purposes of the firm,c.) affidavit certifying that the firm is not affiliated with the developer/applicant,d.) an affidavit from the developer/applicant certifying that they are not affiliated with

the market analysis firm must also be submitted. All documentation must be to the satisfaction of the HHFDC.

Exhibit 25 Current appraisal, if available. Whenever the HHFDC provides loan financing, an appraisal report conforming to USPAP standards shall be at the expense of the applicant and ordered by the HHFDC. Prior to ordering the appraisal, the HHFDC will require the applicant to deposit with the HHFDC sufficient funds to pay for the entire cost of the appraisal report. Appraisal reports ordered by the applicant may not be acceptable. Appraisal reports ordered and prepared for any federally insured lender or HUD approved lender will be acceptable, but shall be subject to a satisfactory review by HHFDC and an appraiser engaged by the HHFDC if deemed necessary by HHFDC, at the applicant/developer’s expense.

Exhibit 26 Terms and conditions of the proposed financing, including commitment letters, from all financing sources and/or tax credit syndicators.

Exhibit 27 Commitment letters or executed contracts for operating subsidy.

Exhibit 28 One half size set of plans for each application. As a supplement, forward only one full size set of plans.

Plans and specifications to include a) site plan at a minimum scale of 1” = 40’ which delineates the building types, common elements and parking (including handicapped designations). Project Data must be included on the site plan sheet: zoning and building code information, both allowable and proposed, under which the project was designed (e.g., parking, height limits, floor area ratio, lot coverage, setbacks, type of construction, etc.; b) floor plans of each building type at a minimum scale of 1/8” = 1’0”. Handicapped clear spaces shall be shown dashed on the plans and reference shall be made to the code from which it was derived (e.g., UBC, FFHAA, UFAS, etc.); c) exterior elevations of each building type at a minimum scale of 1/8” = 1’0”. Indicate finish materials; and d) unit plans.

Applicant should be aware that a final copy of the plans will need to be approved by the State of Hawaii, Disabilities and Communications Access Board prior to funding and start of construction.

Exhibit 29 Formal designation made by the governmental agency, such as the State, City and/or County of the revitalization plan. Detailed explanation on how this plan will integrate in to the revitalization plan for the community.


Exhibit 30 Description of the Community Service Facility. Provide details on how the Community Service Facility will be made available to the Community-at-large and how the facility will be used.

Exhibit 31 Opinion Letter from CPA or Tax Counsel (for Low Income Housing Tax Credit program only). The opinion should address the following: (i) proposed transaction meets the requirements of Section 42 of the Internal Revenue Code (IRC), (ii) the proposed project’s estimated costs and eligible basis in the application, schedules, and exhibits were reviewed and represented in accordance with Section 42 of the IRC and (iii) the proposed transaction shall conform to the 10-year rule, if applicable.

Exhibit 32 Current income limits and maximum tenant contribution schedules as established by HUD.

Exhibit 33 Current utility allowance schedule as established by the county office in which the project is located or alternative calculation allowed by LIHTC Program.

Exhibit 34 Copy of a letter submitted to the Local Public Housing Authority. See sample form letter in the application forms section.

Exhibit 35 Copy of a letter submitted to the State of Hawaii, Department of Human Services, Homeless Programs Office. See sample form letter in the application forms section.

Exhibit 36 Capital Needs Assessment (if applicable). The Capital Needs Assessment should be dated no earlier than six months from the date of the application.

Exhibit 37 Comparative analysis of conventional water heating system and solar water heating system (if applicable).

Exhibit 38 Architect Certification – Energy Efficiency and Green Building standards. Applicants must submit a certification from the Architect confirming that the Project can meet the required building standards for the category selected in Section I: General Information, H) Energy Efficiency and Green Building Practices.

Exhibit 39 Special Housing Need documentation and support (if applicable).


State of HawaiiHawaii Housing Finance and Development Corporation

Financing Program Application Form

Application Submission Sheet

I. INFORMATION:

APPLICANT NAME: The Applicant is the direct project ownership entity. Ownership entity must be established and registered with the State of Hawaii. HHFDC no longer accepts “to be formed” entity names.PROJECT NAME:

II. FINANCING PROGRAM APPLYING FOR:

Amount Enclosed:Low Income Housing Tax Credit – Volume Cap (9%) ($1,500 All Applicants) $ Low Income Housing Tax Credit – Non-Volume Cap (4%) ($1,500 All Applicants) $

Rental Housing Revolving Fund ($500 All Applicants) $

Hula Mae Multi-Family ($500 All Applicants) $

Dwelling Unit Revolving Fund ($2,000 All Applicants) $

Rental Assistance Revolving Fund (no application fee) n/a

Total Due to HHFDC $

All application fees shall be in the form of a cashier’s check made payable to the “Hawaii Housing Finance and Development Corporation”. No personal checks will be accepted.

Consolidated Application April 1, 2016Application Submission Sheet Page 1

III. INCOME AND RENT RESTRICTIONS Applicant commits to set-aside units based on the following income and rent restrictions.Complete the chart below.

Affordable Units

Restricted at % of AMGI Number of units Percent of total units

% of AMGI units %

% of AMGI units %

% of AMGI units %

% of AMGI units %

% of AMGI units %

% of AMGI units %

Total Affordable Units units

Manager’s Unit units %

Market Rate Units units %

Total Number of Units units %AMGI = Average Median Gross Income

IV. LENGTH OF AFFORDABILITY COMMITMENT

How long will your project commit to affordability restrictions and program compliance?(30-year minimum Internal Revenue Code requirement for LIHTC projects.)

Years


V. HHFDC FINANCIAL PROGRAM(S) APPLYING FOR:(If you are applying for financing from one program for different phases in development, please list separately. For example if you are applying for both construction and permanent financing from the RHRF please list them separately.)

Low Income Housing Tax Credit Program

Volume Cap (9%)(From the State of Hawaii’s LIHTC Volume Cap)

Non-Volume Cap (4%)(Applicant has secured or will secure Tax-exempt Private Activity Volume Cap)

Hula Mae Multi-Family Revenue Bond Program


Annual LIHTC Requested: Per Unit:

Federal: $ $

State: $ $

Volume Cap Requested $

Type of Loan:

Bond Term months

Repayment/

Amortization

Rental Assistance Revolving Fund

Rental Housing Revolving Fund

Type of Loan:

Construction/Interim Loan Permanent Loan

Acquisition Loan Rehabilitation Loan

Loan Request:

Interim/Construction Permanent

Principal $ $

Term months months

Interest Rate % %

Security

Repayment/

Amortization


Interim/Construction

Principal $

Term months

Interest Rate %

Security

Repayment/

Amortization

Dwelling Unit Revolving Fund

Type of Loan

Pre-Development/Feasibility Construction Loan

Acquisition Loan Rehabilitation Loan

HHFDC’s receipt of this application, consisting of the prior-referenced documents,does not constitute acceptance of this application.

THE ORIGINAL AND TWO COPIES OF THE FINAL APPLICATION AND THE CASHIER’S CHECK MUST BE RECEIVED BY THE HHFDC BY 2:00 P.M. on the indicated deadlines.

Send or deliver application materials to:

Hawaii Housing Finance and Development CorporationAttn: Finance Department677 Queen Street, Suite 300

Honolulu, Hawaii 96813

Incomplete applications, late applications, and applications that fail to meet individualprogram criteria, shall be returned to the applicant without further action.

Applicant:

Applicant Representative:(Signature, Date)


Volume Cap Requested $

Type of Loan:

Term months

Interest Rate %

Repayment/

Amortization

Certifications and Assurances

Whereas, (the “Applicant” is applying to the State of Hawaii – Hawaii Housing Finance and Development Corporation (the “Corporation”) for financing assistancefrom the following programs (check those applicable):

Dwelling Unit Revolving Fund (DURF)Hula Mae Multi-Family (HMMF) Revenue Bond ProgramLow Income Housing Tax Credit (LIHTC) ProgramRental Assistance Revolving Fund (RARF) Program for Interim Construction FinancingRental Housing Revolving Fund (RHRF) Project Award Program(programs checked off collectively referred to as the “Programs”) and,

Whereas, the Applicant understands that it is necessary that certain conditions be satisfied as part of the Application requirements.

Therefore, the Applicant certifies as follows:

1. The Applicant is eligible for award under state statute and guidelines for the Programs.

2. The Applicant agrees to comply with all applicable federal, state, and local regulations in the event that this Application is selected for funding.

3. The Applicant will minimize displacement as a result of activities assisted with the Programs resources and assist persons displaced as a result of such activities.

4. The Applicant will actively market in an ongoing manner all rental units and services funded through the Programs.

5. The Applicant is prepared and has the authority within its charter, bylaws, or through statutory regulations to enter into a contractual agreement with the Corporation for acceptance and use of financing assistance offered by the Programs. The Applicant makes this Application and certification with full cognizance of its governing body.

6. The Applicant agrees that the Corporation will at all times be indemnified and held harmless against all losses, costs, damages, expenses and liabilities whatsoever in nature or kind (including, but not limited to attorney’s fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgment, any loss from judgment from the Internal Revenue Service) directly and indirectly resulting from, arising out of, or related to acceptance, consideration and approval or disapproval of such allocation request.

7. The Applicant understands and agrees that the Corporation retains the right to contact local government officials, representatives of other funding programs, or other individuals to verify or obtain additional information about Applicant’s proposals. The undersigned hereby agrees and allows the release of any and all information to the Corporation in regards to the representations made within this Application. Such information may include credit history and ratings verifications, confirmation of involvement in past developments, and all other information, on the Applicant entity and principals, thereof, as may be required by the Corporation. This information will be used solely by the Corporation to aid in making a determination as to the awarding of financing assistance offered by the Programs to the Applicant and will not be disclosed outside the

Consolidated Application April 1, 2016Certification and Assurances Page 1

Corporation, except as required and permitted under law.

8. The Applicant has received, reviewed and accepts all the documents (e.g. Overview, Instructions, Qualified Allocation Plan, etc.) that are attached to the Application and made a part hereof.

9. The Applicant agrees to abide by all the terms, conditions and provisions of the Programs.

10. The Applicant understands and agrees that the Corporation’s receipt of an Application does not constitute acceptance of the Application. The Corporation reserves the right to return an Application at any time without taking further action on the Application due to, but not limited to, the following:

a. Failure to meet Application submittal requirements (e.g., timeliness, correct application fees, cashier’s check, correct number of copies).

b. Failure to meet individual program criteria (e.g., applicant eligibility and income set-aside requirements, etc).

c. Failure to disclose in the Application any known material defects about the development of the Project, any misrepresentation or fraud.

d. Incomplete Application. The Application received by the deadline constitutes the final Application (the “Final Application”). Any Final Application deemed by the Corporation to be incomplete shall not be processed.

11. The Applicant understands and agrees that the awarding of funds is subject to the availability of funds and approval by the Governor of the State of Hawaii.

12. The Applicant understands and agrees that the Corporation reserves the right to make an award for less than the eligible amount requested by the Applicant.

13. The Applicant understands and agrees that the Corporation reserves the right to accept or reject any Application, to make awards to as many or as few Applicants as it may select, and to make awards to entities other than applicants.

14. The Applicant further understands and agrees that:

a. The Corporation reserves the right to cancel, suspend, or terminate, in part or in whole, any funding round, if the Corporation, in its sole discretion, deems it to be in its best interest to do so;

b. The Corporation reserves the right to reject any Application submitted and may exercise such right without notice and without liability to any Applicant or other parties for their expenses incurred in the preparation of an Application.

c. Applications are prepared at the sole risk and expense of the Applicant. The completion, receipt, or acceptance of an Application does not commit the Corporation to pay any costs incurred in preparation of the Application. The Corporation shall not be responsible for any costs incurred by the Applicant due to the cancellation, suspension, or termination of such funding round, or the rejection of any Application.

15. The Applicant understands and agrees that the Corporation in no way represents or warrants to any party which may include, but is not limited to, any developer, project owner, investor, or lender that the Project is, in fact, feasible or viable. No director, commissioner, officer, agent, staff or employee shall be personally liable concerning any matters arising out of, or in relation to, the


disapproval or the making of awards from the Programs.

16. The Applicant is responsible to review the applicable federal/state laws as they relate to the respective Programs to ensure compliance with current regulations.

17. The Applicant is responsible for compliance with all of its project’s program requirements, including programs not administered by HHFDC.

18. That the foregoing information and the statements made in this Application are true, complete, accurate and correct to the best of the Applicant’s knowledge, and hereby authorizes the Corporation to obtain further information and to verify any statement made as it deems necessary.

19. The Applicant understands that the completed and accepted Application is subject to Chapter 92F, Hawaii Revised Statutes, the Uniform Information Practices Act of the State of Hawaii.

In Witness Whereof, the Applicant has caused the document to be executed in its name on the day of , 20 .

Applicant

By:(signature)

Its: (title)


State of HawaiiHAWAII HOUSING FINANCE AND DEVLOPMENT CORPORATION

Finance Branch677 Queen Street, Suite 300

Honolulu, Hawaii 96813(808) 587-0567

APPLICANT CREDIT INFORMATION AUTHORIZATION

1. Applicant’s Full Name (include Jr. or Sr., if applicable)

2. Social Security Number

3. Present Address (street, city, state, zip)

(Street)

(City, State, Zip)

Authorization: I authorize the HHFDC, its agents, successors and assigns, to order a consumer credit report and verify other credit information, including past and present mortgage and references. It is understood that a photocopy of this form will also serve as authorization. The information the HHFDC, its agents, successors or assigns obtains is only to be used in the processing of my application.

___________________________ ____________________Applicant’s Signature Date

Consolidated Application April 1, 2016Credit Authorization

Low Income Housing Tax Credit Threshold Certifications and Assurances

Whereas, (the “Applicant” is applying to the State of Hawaii – Hawaii Housing Finance and Development Corporation (the “Corporation”) for Low Income HousingTax Credits (check one:

Low Income Housing Tax Credits – Volume Cap (9%)Low Income Housing Tax Credits – Non-Volume Cap (4%)

Whereas, the Applicant understands that it must satisfy the Application’s threshold requirements.

Therefore, the Applicant certifies as follows:

1. A comprehensive Market Study of the housing needs of low-income individuals in the area to be served by the project by a disinterested party is submitted as Exhibit 24 as part of this application.

2. The Applicant has site control and evidence of site control is submitted as Exhibit 14 as part of this application.

3. If an existing project is being acquired, a capital needs assessment of the project is submitted as Exhibit 36 as part of this application.

4. All low-income units will be made available to people on the waiting list for low-income public housing and/or an acceptable shelter program and a copy of the letter submitted to 1) the local public housing authority which administers the public housing waiting list and 2) the Department of Human Services, Homeless Programs Office is submitted as Exhibits 35 and 36 as part of this application.

5. The project will be smoke free. Smoking will be prohibited in all indoor common areas, individual living areas (including balconies and lanais), and within 25 feet of building entries or ventilation intakes. A non-smoking clause will be included in the lease for each household.

6. The contractor’s profit, including general requirements and overhead, shall not exceed 14.0% of hard construction costs as described in page 6 of the Qualified Allocation Plan.

7. Exhibits A-G (Financial Worksheets) were prepared following the Debt Service Ratio requirements on page 7 of the Qualified Allocation Plan.

8. A Phase I Environmental Assessment is submitted as Exhibit 22 as part of this application.

9. If applying under the Federal non-profit set aside, the Articles of Incorporation and a copy of a current 501(c)(3) IRS Tax Exemption Letter is submitted as Exhibit 1 part of this application.

10. The Developer Fee does not exceed the maximum threshold cap on page 8 of the Qualified Allocation Plan.

Consolidated Application April 1, 2016LIHTC Threshold Certification Page 1

11. Applicant understands and agrees that the Corporation’s receipt of an Application does not constitute acceptance of the Application. The Corporation reserves the right to return an Application at any time without taking further action on the Application due to, but not limited to, the following:

a. Failure to meet Application submittal requirements (e.g., timeliness, correct application fees, cashier’s check, correct number of copies).

b. Failure to meet threshold requirements.c. Failure to meet individual program criteria (e.g., applicant eligibility and income set-aside

requirements, etc).d. Failure to disclose in the Application any known material defects about the development

of the Project, any misrepresentation or fraud.e. Incomplete Application. The Application received by the deadline constitutes the final

Application (the “Final Application”). Any Final Application deemed by the Corporation to be incomplete shall not be processed.

12. That the foregoing information and the statements made in this Certification and Application are true, complete, accurate and correct to the best of the Applicant’s knowledge, and hereby authorizes the Corporation to obtain further information and to verify any statement made as it deems necessary.

13. The Applicant understands that the completed and accepted Application is subject to Chapter 92F, Hawaii Revised Statutes, the Uniform Information Practices Act of the State of Hawaii.

In Witness Whereof, the Applicant has caused the document to be executed in its name on the day of , 20 .

Applicant

By:(signature)

Its: (title)

Consolidated Application April 1, 2016LIHTC Threshold Certification Page 2

State of HawaiiHawaii Housing Finance and Development Corporation

Financing Program Application Form

Section I - General Information

Project Name

1. APPLICANT INFORMATION

A) Applicant Information

Applicant Name:

The Applicant Name is the project owner. HHFDC requires registration of the project owner with the State of Hawaii. HHFDC no longer accepts “to be

formed” entities as the entity names.

Applicant Contact Name, Title:

E-Mail Address: Phone Number:

Applicant Address: Fax Number:

Applicant Tax ID Number (REQUIRED):

Fill in the information below if application was prepared by a person or entity different from the applicant.

Application Preparer Name:

Application Preparer Contact Name, Title: Phone Number:

E-Mail Address:

Applicant Address: Fax Number:

Consolidated Application April 1, 2016Section I: General Information Page 1

B) Applicant Organization / Entity (Check the appropriate box)

Non-profit organization(Qualified, existing 501(c)(3) or (4) organization, as determined by the Internal Revenue Service)

If the applicant is a Non-profit organization include Exhibit 1 and Exhibit 2.

Private developer

Limited Partnership General Partnership

Corporation Limited Liability Corporation

Other:

Government Identify (Level of Government and Department)

County Government:

State Government:

Department:

All applicants must submit Exhibit 3, Exhibit 4, Exhibit 5, Exhibit 6, and Exhibit 7 as applicable.

C) Applicant Experience

Check the appropriate box:

Applicant has no prior experience in developing or owning affordable rental housing.

Applicant has prior experience in developing or owning affordable rental housing.

If the Applicant has experience in developing or owning affordable housing, please complete Exhibit 8.


D) Project Team Information (Complete with name, address and phone number)

Complete Exhibit 9 for each Project Team member

Developer:

Contact:

Address:

Phone: Fax:

E-Mail:

Role/Responsibility:

Complete Exhibit 8.

Consultant:

Contact:

Address:

Phone: Fax:

E-Mail:



Financial Advisor/Underwriter*:

Contact:

Address:

Phone: Fax:

E-Mail:


*Required for public issuance of HMMF Bond transactions and highly recommended for private placement of HMMF Bond transactions.

General Contractor:

Contact:

Address:

Phone: Fax:

E-Mail:



Architect:

Contact:

Address:

Phone: Fax:

E-Mail:


Management Agent:

Contact:

Address:

Phone: Fax:

E-Mail:


Submit Exhibit 10. Applicant is required to identify a management agent. If there is a change in the management agent, applicant is required to notify HHFDC and submit Exhibit 10 for the new management agent. For 9% LIHTC applicants, the new management agent must score points equal to or greater than the points scored by the previous management agent in Criterion 9 of the QAP.


Legal Counsel:

Contact:

Address:

Phone: Fax:

E-Mail:


Tax Counsel:

Contact:

Address:

Phone: Fax:

E-Mail:


Certified Public Accountant:

Contact:

Address:

Phone: Fax:

E-Mail:



2. SITE INFORMATION

A) Location

B) Site Size

Acres Square Feet

C) Present legal owner of the project site

Name

Address

City, State, Zip Code


Address

City

Tax Map Keys (TMK):

State

Island

Zip Code

Legislative District (for Neighbor Islands)

Census Tract(s)

Neighborhood Board (for Oahu)

Special design or management districts

Submit Exhibit 11, Exhibit 12, and Exhibit 13.

D) Site Control Status

Own site - fee simple

Executed ground lease Expires on:

Option to purchase Expires on:

Option to lease Expires on:

Other Describe:

Expires on:

Submit Exhibit 14 and 16. Submit Exhibit 15, if applicable.

E) Special Site Classification

The five (5) classifications below are considered for the purposes of this application to be difficult development zones. In most instances, none of the categories will be applicable. If that is the case with your project, then type in “NA” next to each category. However, if one of the categories is applicable, then check the box next to that category and briefly describe what impact being located in that particular zone may have on your project. For the Flood Zone, please indicate the flood zone designation for the site from FEMA. (NOTE - applicants may be required to provide a complete description of the problem and what mitigating measures will be taken to reduce the impact on the project).

If the site has a site classification that is not one of the listed classifications, please check “Other” and describe the site classification.

Identify:

Flood Zone

Tsunami (Intertidal Area)

Special Management Area

Special or Historic District

Shoreline Protection Area

Other (wetlands, volcano, etc.)

Submit Exhibit 17, if applicable.


F) Zoning

Current Zoning Designation:

Land Use Classification:

Will your project conform to the existing zoning for the property? Yes No

If no, describe your action plan for obtaining the appropriate zoning or zoning exemptions.List the variances and/or special use permits required.

Submit Exhibit 18.

G) Does this project involve any relocation of tenants or existing homeowners?

Yes No

If yes, please describe any proposed relocation assistance:

H) Environmental Assessment

State statutes mandate that an Environmental Assessment (EA) be completed for all projects receiving state funds. Although you may submit an application without having completed the EA process, the Board will only award funding subject to the completion of the EA process.

To receive funding, projects must have completed and filed the Finding of No Significant Impact (FONSI) or completed and filed the Environmental Impact Statement (EIS) with the State’s Office of Environmental Quality Control. Please check the box that most appropriately describes the status of your project. If an EA, EIS, or FONSI is required, please provide the estimated completion date and identify the accepting agency for the EA.

Please identify the accepting agency for the EA.

If a Federal EA or EIS is required, please check the appropriate box and provide the date of publication or the estimated completion date.

Accepting Agency:

Check if applicable Date of publication in the Office of


Environmental Quality Control (OEQC) Bulletin or estimated completion date.

No EA or EIS is required

EA In Progress

EA Published

Finding of No Significant Impact Published

EIS In Progress

EIS Published

Federal EA or EIS Required

Submit Exhibit 20.

I) Availability of Utilities

Submit Exhibit 21

Yes No

Will the project utilize gas for cooking or water heating?

If yes, is gas service currently available to the site?

Is electricity service currently available to the site?

Sewer/Septic service is currently available to the site for the number and type of units proposed.

Water is currently available for the proposed number of units and type of units for this project.

Does the site have a hook-up to telephone service?

Does the site have a hook-up to cable or internet service?


J) Off-Site Improvements

Please provide information on the availability of utilities and site access for the proposed project. Please include information on existing infrastructure capabilities and any planned or potential expansion of infrastructure needed to develop this project.

WaterExisting:

Planned:

Sewer:Existing:

Planned:

Drainage:Existing:

Planned:


RoadsExisting:

Planned:

ElectricExisting:

Planned:

GasExisting:

Planned:


Telephone, Television,and Data

Existing:

Planned:

K) On-Site ImprovementsIdentify the benefits in use or disclose any potential problems associated with your proposed site.

FAILURE TO DISCLOSE ANY KNOWN MATERIAL DEFECTS MAY RESULT IN AN IMMEDIATE DISQUALIFICATION FROM FURTHER CONSIDERATION. PLEASE COMPLETE THE ENVIRONMENTAL QUESTIONNAIRE. Please attach additional pages if needed.

Access to SiteList major access points. Is the access convenient or are there any hazardous conditions limiting access to the site? Are any easements necessary for access?

Availability of UtilitiesDoes the project have sewer, water, and electricity immediately available for hook-up? Will the project trigger upgrades to the existing utility infrastructure?

Site Improvements


What is currently on the site? List the existing structures, if applicable. If there are any existing structures, will there be any displacement of tenants? How will this displacement be handled? Will existing structures be renovated or demolished?

Topography and soilsIs the site developable? Is there a soils engineering study available for review? Is there a topographic survey of the site? Will the site require any grading due to the slope?

Environmental Issues (Submit Exhibit 22.)What existing environmental conditions exist at the site? What environmental conditions may affect the development of the site? The HHFDC requires a Phase I Environmental Site Assessment.


3. PROJECT DESCRIPTION

A) Project Classification

What type of project are you planning? (Check all that apply)

Apartment building

Garden Style Mid-rise High-rise

Cluster Single-family dwelling units

Townhouse Duplex, triplex, fourplex

New Construction Rehabilitation Acquisition

B) Project Unit MixFill in the appropriate number in the table below.

No. of Buildings

Studios

1 BR

2 BR

3 BR

4 BR

Total units

Gross Building Area in

square feet

SF / unit

SF / unit

SF / unit

SF / unit

SF / unit

Gross Residential Area

Common Area (in square feet)

Commercial Space (in square feet)

Total Area

Above information needs to reconcile with submitted building plans and application exhibits.IN PARTICULAR, TOTAL AREA MUST RECONCILE WITH TOTAL AREA ON EXHIBIT A AND THE SUMMARY SHEET.

If you need more space, attach a separate sheet with the information requested above.


Type of construction?Description of Buildings. (i.e. # of floors, # of units per building, # of elevators, concrete)

Number of Buildings:

C) Project Amenities

The Project will include the following amenities (changes not permitted without HHFDC consent):

Playground/Tot lot Picnic Area Swimming Pool

Community Meeting Room Elevator Transportation

Laundry Room Computer with high-speed internet access

Other (describe)

D) Unit Amenities

Each unit will include the following amenities (changes not permitted without HHFDC consent):

Range Refrigerator Air Conditioning Disposal

Dishwasher Washer Dryer Carpet

Drapes Furniture Heating Cable TV

High speed internet access Other (describe)

E) Parking

How many parking spaces will be provided at the project site? Please complete the table below.

Number of spaces Ratio of Spaces/Units

Tenant

Guest

Handicap Accessible

Commercial

Total

Will a fee be charged to tenants for parking in addition to rent? Yes No


F) Proximity to Services, Schools, Shopping and Recreational Opportunities

Please identify schools, recreational facilities, and shopping facilities are located in the immediate vicinity of the project site (i.e., within walking distance for occupants or accessible by mass transit).

Identify Distance:Super Market/Grocery Store:

Schools:(family project)

Elementary

Middle

High

Child care:(family project)

Public Library:

Healthcare:

Community Center/ Activities:

Park/Playground:

Bank/Financial Services:

Public Transportation:

Employment:


G) Project Schedule

Indicate the approximate dates for the following:


Milestones: Date

Approval of 201 (H) Variances:

Projected Building Permit Date:

Closing of Construction Financing:

Construction Start Date:

Projected Occupancy Permit Date:

Placed in service date:

First Building:

Last Building:

Achievement of occupancy for 100% of the units:

Achievement of 95% stabilized occupancy:

Submit Exhibit 23.

H) Energy Efficiency and Green Building Practices

Project will utilize a solar water heating system. (If this item is not checked, please submit Exhibit 37.)

Project will be Energy Star Certified.

Project will be Enterprise Green Communities Certified.

Project will be LEED Certified.Certified SilverGoldPlatinum

Project will be National Green Building Standard Certified. BronzeSilverGoldEmerald

Submit Exhibit 38 – Certification from the Architect confirming that the Project can meet the required building standards for the category selected above. Upon Project completion the project owner is required to submit the certification it elected from the corresponding entity governing the certification.

List other green building practices implemented in the proposed project:


4. TARGET POPULATION

A) Occupancy Type

Number of units

Family units

Elderly* units

Homeless units

Tenants with Special Housing Needs units

Total Affordable Units units

Manager’s Unit units

Market Rate Units units

Total Number of Units Units

*Please refer to the definition of Elder or Elderly Households as defined in Chapter 201H-1, HRS.

(Elderly Housing in and of itself, does not constitute Special Housing Needs.)

In the space provided below, please describe the special housing need served by this project. Attach Exhibit 39 – supporting documentation. Note: The special housing unit reservation is exclusive to that particular need group. The market study is required to specifically address the market demand of the identified special needs group and the project’s ability to meet that demand.


B) Accessible units

Number of Accessible units

Number of Adaptable units

C) Availability

Will all of the residential units be available to the general public? Yes No

If you answered no, please qualify which populations the units will be made available to.

5. SOURCES AND USES

A) Sponsor EquityIndicate the TOTAL DOLLAR AMOUNT in the form of cash (or equivalents) and/or real estate contributions that your organization will directly contribute to the project1. Do not include Deferred Developer Fees or other deferred costs. Sponsor equity should be “first in” and not decrease from interim to permanent financing.

If real estate is part of your equity contribution, provide a copy of an appraisal report and an independent CPA opinion letter on the equity valuation of the contribution. Please note that whenever the HHFDC is providing loan financing, an appraisal report conforming to USPAP standards shall be at the expense of the applicant and ordered by the HHFDC. Prior to ordering the appraisal, the HHFDC will require the applicant to deposit with the HHFDC sufficient funds to pay for the entire cost of the appraisal report. Appraisal reports ordered by the applicant may not be acceptable. Appraisal reports ordered and prepared for any federally insured lender or HUD approved lender will be acceptable, but shall be subject to a satisfactory review by HHFDC and an appraiser engaged by the HHFDC if deemed necessary by HHFDC, at the applicant/developer’s expense.

$ Cash invested at closing

$ Real Estate

$ Total Sponsor Equity

1 Only list items that shall remain in the project as a permanent source.


B) Financing Plan

Construction Financing: List sources of construction financing.

Source Amount

Type(Loan/

Grant or Equity)

Secured2/Unsecured

Applied (Yes or No)

Committed(Yes or No)

Int. Rate/Term

Sponsor Equity Equity

LIHTC Proceeds Equity

Total*

*NEEDS TO RECONCILE WITH PERMAMENT FINANCING (NEXT TABLE), TOTAL PROJECT COSTS (EXHIBIT A), AND SUMMARY SHEET.

2 If the financing is secured by a mortgage, please indicate the position of the mortgage relative to all financing. Example: First Mortgage.


Permanent Financing: List sources of permanent financing.

Source Amount

Type(Loan/

Grant or Equity)

Secured3/Unsecured

Applied (Yes or No)

Committed(Yes or No)

Int. Rate/Term

Sponsor Equity Equity

LIHTC Proceeds Equity

Total*

*NEEDS TO RECONCILE WITH CONSTRUCTION FINANCING (PRIOR TABLE), TOTAL PROJECT COSTS (EXHIBIT A), AND SUMMARY SHEET.

Submit Exhibit 26.

3 If the financing is secured by a mortgage, please indicate the position of the mortgage relative to all financing. Example: First Mortgage.


C) Operational Subsidies

Will any low-income units receive Rental Subsidy? Yes No

Is the Rental Subsidy a new subsidy for the project: Yes No

Subsidy Program # of Units Term of Commitment Status New or Existing Subsidy

If the Project will receive rental subsidies, please fill out the following chart.

In the space provided below, please summarize each subsidy program that will be utilized by the project. Include the source of the project, terms of the subsidy, the population served and any other pertinent information below. Also include any restrictions imposed on the project by using the subsidy. If the subsidy has not yet been awarded, please provide status on the application including a project award date and a projected date the subsidy will be available.

If project will be receiving operating subsidy, submit Exhibit 27.


D) Developer Fee

At 50% Completion At 100% Completion At 100% Lease-Up Total

$ Amount % $ Amount % $ Amount % $ Amount %

Developer Overhead Developer Fee N/A* Consultant Fee Project Management *No Developer Fee disbursement prior to project completion.

IMPORTANT REMINDER: HULA MAE MULTI-FAMILY BOND PROGRAM APPLICANTS, LOW INCOME TAX HOUSING TAX CREDIT APPLICANTS, AND RENTAL HOUSING REVOLVING FUND APPLICANTS, PLEASE BE SURE TO REVIEW AND/OR COMPLETE THE APPLICABLE PROGRAM SECTION(S)

PROGRAM SECTION II HULA MAE MULTI-FAMILY REVENUE BOND PROGRAM APPLICANTS

PROGRAM SECTION III LOW INCOME TAX HOUSING TAX CREDIT APPLICANTSPROGRAM SECTION IV RENTAL HOUSING REVOLVING FUND APPLICANTS


QuestionsRespond to each question, but limit your response to ONE PAGE or less per question.

Please answer one question per page, include the question addressed at the top of the page.

1. Describe the objectives of the project. Describe the specific housing need, or the opportunity, that your project is intended to address. When your project is complete, what other needs (i.e., beyond shelter) will your project meet?

2. Describe how the proposed project will increase the integration of income levels in the immediate community area.

3. How does the project fit into state, regional, and local housing plans? Where does the project fit in relation to community development, land use, and zoning plans?

4. What evidence is there that substantiates the housing problems or the housing needs that you are attempting to meet with your project? Provide evidence of the problems being faced and the needs being addressed of low-income or special needs populations in your project area. Address the shortage or oversupply and/or demand for the units in the area.

5. Describe the design features (i.e., larger bedrooms, wider hallways, etc.) you are including in your project. How will these features address the health and safety concerns of the owners/tenants? How will these features enhance the project’s ability to meet the target population’s needs?

a. Describe any physical amenities in your project designed to improve the quality of life for the tenants beyond shelter (e.g., space for resident meetings/gatherings, learning center, etc.).

b. If you feel that the total construction cost of your project may be higher than similar projects in the area or the State, is there any justification for the higher construction cost? Is there any reason why your project should be selected over other similar project(s) whose construction costs may be lower?

c. Describe the compatibility of your proposed project with the surrounding land uses/density.

d. Describe the overall suitability/compatibility of the targeted population of your project with the project location, site characteristics and project design.

6. Describe any associated social or special services that will be provided, if applicable.

7. Summarize your organization. Outline your organization’s experience in developing and/or in managing affordable rental housing.

a. If your organization is successful in obtaining all the necessary financing, describe what effect the project will have on workload of your organization.

b. Does your organization have the resources, both fiscal and human, to complete the project within the proposed time frame?

8. What are the main contingencies to the project?


9. Provide a detailed description of how the project will be managed, if “Rental Project”. If “For Sale Project” detailed description of sales force and plan. Include anticipated staffing, programs, etc.

10. Describe your affirmative marketing plan. You may complete and attach HUD Form 935.2A, 935.2B, or 935.2C, Affirmative Fair Housing Marketing Plan, for Multifamily, Single Family, or Condominiums or Cooperatives, respectively. Follow link to access HUD Form:http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/forms/hud9a


http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/forms/hud9a

SECTION II

PLEASE REVIEW AND/OR COMPLETE IF APPLYING FOR:

HULA MAE MULTI-FAMILY PROGRAM

(PROVIDES INTERIM CONSTRUCTION & PERMANENT BOND FINANCING)

- Application

- Minimum Threshold Requirements

- Program Criteria Scoring System

SECTION II - HULA MAE MULTI-FAMILY PROGRAMApplication

Project:

Owner/Borrower:

Developer:

Volume Cap Requested:

Principal Amount: Interim:

Permanent:

Term of bonds. Interim:(In Months/Years) Permanent:

Total:

Type of bond to be issued: Private Placement Public Issue

Credit Enhancement / Bond Insurance:

Projected Interest Rate:(Underwriting Rate) Fixed Rate Variable Rate

Will a swap be used?

If yes, identify swap provider.

Yes No

Will this issue be rated?

If yes, identify proposed rating agency.

Yes No

Projected Bond Issuance Date:

Projected Bond Conversion to Permanent Date:

Consolidated Application April 1, 2016Section II: Hula Mae Multi-Family Program Page 1

Proposed Purchaser:

Purchaser’s Counsel:

Underwriter:*

Underwriter Counsel:

Trustee:*

Trustee Counsel:

Borrower’s Counsel:

Borrower’s Tax Counsel:

Financial Advisor:**

*Required for public issuances; subject to approval by the State of Hawaii – Department of Budget and Finance.

**Highly recommended for private placements; may be required at the sole discretion of HHFDC or the State of Hawaii.

Proposed bond structure must be supported by a commitment letter, term sheet, or letter of interest in Exhibit 26.

Please provide a narrative description of your transaction.


SECTION II - HULA MAE MULTI-FAMILY PROGRAM

MINIMUM THRESHOLD REQUIREMENTS

Applicants must meet the following Minimum Threshold requirements to receive consideration for financing from the HMMF Bond program.

Market Study:A comprehensive Market Study of the housing needs of the proposed target population in the area to be served by the project by a disinterested party approved by the HHFDC must be submitted as part of this application. The Market Study shall be completed at the Owner’s expense. Any application failing to submit a Market Study or submits a Market Study dated over 6 months from the time of application will not be considered for the HMMF Bond program.

Market Study requirements are specified in Appendix 1 in the Qualified Allocation Plan for Low Income Housing Tax Credits.

Site Control:To receive consideration for an award of HMMF, the applicant must have control of the site in a form acceptable to the HHFDC. Evidence of site control shall be submitted with the application for financing from the HMMF Bond program. Site control shall be substantiated by providing evidence in the form of an executed lease or sale option agreement, fee simple deed, executed land lease, or any other documentation acceptable to the HHFDC. Evidence of site control must be provided for all proposed sites.

Capital Needs Assessment (For projects acquiring an existing property):To ensure that the proposed rehabilitation of the project is adequate and that the property will have a useful life that exceeds the compliance and extended use period. A capital needs assessment of the property by a competent third party shall be submitted with the application. A capital needs assessment is a qualified professional’s opinion of a property’s current physical condition. It identifies deferred maintenance, physical needs and deficiencies, and material building code violations that affect the property’s use, structural and mechanical integrity, and future physical and financial needs. The Capital Needs Assessment should be dated no earlier than six months from the date of the application.


SECTION II - HULA MAE MULTI-FAMILY PROGRAM

EVALUATION CRITERIA AND SCORING SYSTEM

All Hula Mae Multi-Family applications will be scored and ranked using the following criteria:

Criteria 1. If, under the Restrictive Covenant Document, the project is “affordable” for:

15 years or less 0 point

16 to 25 years 1 point

26 to 35 years 2 points

36 years through 45 years 3 points

45 years of more 4 points

Criteria 2. With respect to the set-aside affordability, if project provides:

Project will set-aside a greater percentage of low-income units than required under the Internal Revenue Code. Projects committing to provide low-income units greater than the minimum set-aside required under the Internal Revenue Code will be awarded maximum points. The applicant will score points based on the following schedule for every 10% of all units set-aside as low income units. The maximum points possible is 10 points.

40% of AMGI or less = 1 point 50% of AMGI or less = 0.8 point

60% of AMGI or less = 0.6 point Greater than 60% AMGI = 0 points

Example:

# of units Income Target % of units Score Weighted Score

21 40% AMGI or less 21% 1 point 2.1042 50% AMGI or less 42% 0.8 point 3.3632 60% AMGI or less 32% 0.6 point 1.925 Over 60% AMGI 5% 0 points 0

100 Total 7.38A B

(A /Total Units)C (B x C) x 10

If the proposed income restriction for the project does not match the income restrictions cited above, the incomes should be rounded up to the next applicable category.

The income restrictions shall be included as part of the declaration of land use restrictive covenants based on unit count.


Criteria 3. The ratio is derived as: “Total Bond Financing Requested/Total Number of Proposed Low-Income Rental Units”

$250,001/unit or more in bond financing requested, then 0 points

$200,001 through $250,000/unit in bond financing requested, then 1 points



$100,000/unit or less in bond financing requested, then 4 points

Criteria 4. The applicant’s readiness to proceed with the development of this project with respect to development approvals:

If existing project, then 2 points

The applicant has obtained all necessary development approvals for this project and is ready to proceed with the development of this project without any additional development approvals (i.e. zoning changes or 201H, variances). 2 points

Project is not appropriately zoned and/or does not conform to State Land Use regulations or requires 201H, variances, subdivision approval or any other exemption from any local or state land use restrictions. 0 points

Criteria 5. If combined total of developer fee and developer overhead is:

The applicant elects to limit total Developer Fee as a percentage of total development cost as presented in the application. Developer Fee include but are not limited to consulting fees, project management fees, developer overhead and developer fees. Architectural, Engineering, Accounting and Legal fees are not included as Developer Fee.

Greater than 15% of total project cost 0 points

15% of total project cost 1 point

12% of total project cost 1.5 points

10% of total project cost 2 points

8% of total project cost 2.5 points

less than 8% of total project cost 3 points


Criteria 6. Project will be receiving project-based rental assistance subsidies which would result in eligible tenants paying approximately 30% of their gross monthly income towards rent. Eligible programs shall include, but not be limited to, the Rural Development 515 Loan Program and HUD Section 8 project-based Rental Assistance Program.

If the answer to the question is NO 0 points

If the answer to the question in YES 2 points

Criteria 7. Local government support. The project will receive a below market loan or grant, land lease or sale from a State or local governmental agency other than HHFDC which, in total amounts to 10% or more of the total development cost.

The project has not applied for a below market loan or grant from a government agency, or if the total amount applied for is less than 10% of total development costs. 0 points

The project has applied for a below market loan or grant from a government agency. Documentation must be provided evidencing that an application for financing has been submitted. 1 point

The project has received a commitment from a government agency for a below market loan, grant or commitment to sell or lease land. A copy of a commitment letter, government action or contractual agreement must be included in the application. 3 points


Criteria 8. Project location and market demand. 0 to 6 points

The points awarded will be based on HHFDC's evaluation of factors such as, but not limited to:

Project is located in a county's urban core/district (preference) versus rural district;

Employment opportunities, recreational facilities, shopping facilities, medical facilities located in the immediate vicinity of the project site;

Strength of the market study.

Are the proposed rental rates below market rents for the immediate surrounding area?

Are project or housing characteristics (e.g., design, density) appropriate for neighborhood? Does project appear to satisfy market need? Is there documented/supported market demand?

Is location in the neighborhood conducive for senior or family residential use?

Consideration of any issues that would affect the marketability of the proposed project.

Criteria 9. Developer experience. 0 to 6 points

The points awarded will be based on the HHFDC's evaluation of factors such as, but not limited to:

Developer's (or any party affiliated with the development team) experience or ability (or inexperience/inability) to successfully complete the project;

Developer's success or failure in meeting the objectives of the program on past proposals;

Development Team’s success or failure in meeting the objectives of the program on past proposals;

Development Team’s experience or ability to successfully complete the project;

Project's general partner and/or affiliates has a history of chronic and/or substantive noncompliance, has failed to meet the requirements of the Declaration for Low-Income Housing Credits for previous projects, or has any significant tax credit history with other state tax credit allocating agencies.


Criteria 10. Overall Project Feasibility. 0 to 10 points

The points awarded will be based on HHFDC's evaluation of any and all factors that could impact overall project feasibility, such as, but not limited to:

Reasonableness of development costs;

Feasibility of financing structure;

Operational feasibility. For example, unreasonable operating expenses;

Applicant’s readiness to proceed with development of project. Identification of serious issues in need of resolution for the project to proceed in a timely manner and the ability of the Development Team to resolve these issues. (For example, lack of adequate financing sources; land use and zoning issues; utility, water, sewer availability.) The ability of the development team to resolve these issues such that the development of the project will commence in a timely manner;

Adequacy of Reserves including but not limited to Operating Reserve and Repair and Replacement Reserve;

Services and amenities provided to tenants that will enhance the livability of the project;

Adequacy of project contingencies in the development budget.


SECTION III

PLEASE REVIEW AND COMPLETE IF APPLYING FOR:

LOW INCOME HOUSING TAX CREDIT PROGRAM

- LIHTC Application

- Certification

- 2016/2017 Qualified Allocation Plan

SECTION III - LOW INCOME HOUSING TAX CREDIT PROGRAM

Applicant Name:

Project Name:

LIHTC Application

I. General Tax Credit Section

A. Tax Credit RequestPer Unit: Total:

Annual Federal Tax Credits applied for: $ $ Annual State Tax Credits applied for: 4

(Maximum of 50% of Federal Credits) $ $

Submit Exhibit 31

Type of Tax Credit requested:Check One:

Volume Cap (9%) Non-Volume Cap (4%)

New Construction from the State’s annual volume cap.

New Construction with Tax-exempt Bonds

Rehabilitation from the State’s annual volume cap.

Rehabilitation with Tax-exempt Bonds

Acquisition and Rehabilitation from the State’s annual volume cap.

Acquisition and Rehabilitation with Tax-exempt Bonds

B. Applicant elects to receive Low Income Housing Tax Credits from the State of Hawaii’s Non-profit set-aside. (Please refer to Criteria 14 of the 2016/2017 Qualified Allocation Plan.

Yes No

C. Extended Use CommitmentThe applicant will commit to a compliance period of 15 years and an additional use period of years (minimum extended use period is an additional 15 years) for a total of years.

4 The state tax credits are subject to continued state authorization. Applicants are advised to contact the HHFDC to determine the status of this item.

Consolidated Application April 1, 2016Section III: Low Income Housing Tax Credit Program Page 1

D. Tenant’s option to purchase units. Will all tenants have the right of first refusal to acquire their unit in accordance with IRC Section 42(i)(7)?

Yes No

E. Number of Buildings in this project:

For developments with more than one building:

1. Are or will the buildings be located on the same tract of land? Yes No

2. Are or will the buildings be owned by the same person for federal income tax purposes?

Yes No

3. Are or will the buildings be financed pursuant to a common plan of financing? Yes No

F. Is project in a Qualified Census Tract? If yes, Please identify census tract(s)

Yes5 No

Census Tracts:

To determine whether the Project is in a Qualified Census Tract, please refer to www.huduser.org.

G. Does this development contribute to a concerted community revitalization plan, such as the Weed and Seed program, Empowerment Zone and Enterprise Community Initiative?

If yes, please describe specific measures on how this will be achieved.

Yes No

Program:

If the project is in a concerted community revitalization plan, submit Exhibit 29

5 Identify Census Tract.


http://www.huduser.org/

H. Sale/Syndication Information:

Name of Fund: Name of Purchaser/Syndicator:

Estimated proceeds from sale of LIHTCLIHTC Federal StateEstimated Proceeds (gross)Estimated Proceeds (net)6

$ $ $ $

Please separate the proceeds from the sale of State and Federal LIHTC when completing this section.

Estimated LIHTC proceeds should be supported by a commitment letter, term sheet, or letter of interest in Exhibit 26.

II. Community Service Facility

Will the project use eligible basis to develop a Community Service Facility as described in IRC Section 42(d)(4) (c)(iii) as a part of this project as part of its Low Income Housing Tax Credit request?

Yes No

If yes, submit Exhibit 30

An analysis of the Community Service Facility must be included in the market study. The Market Study must address the following:a. feasibility of the proposed community based facility b. the benefit of the proposed community based facility to the communityc. the benefit of the proposed community based facility to persons and families earning 60%

or less of AMI d. the affordability of any fees assessed to the persons and families earning 60% or less of

AMI

III. Acquisition of existing buildings.(Complete if applicable)

A. Building acquired/to be acquired from: Related party Unrelated party

Property is currently owned by:

6 Net of any fees, syndication costs or issuance costs of the investor.


B. If Acquisition from Government Agency, indicate the Name of the Agency:

C. Cost of Acquisition:

D. Complete information below:

Address of BuildingPreviously allocated LIHTC? (Yes/No)

Placed In Service Date of Bldg. by Most Recent Owner

Proposed Date of Acquisition by

Applicant

# of Years Between Placed In Service and Acquisition

E. Rehabilitation of Existing Building:

Proposed Rehabilitation Expense: $ per unit

Date of most recent capital improvements to project costing at least 25% of the adjusted basis of the building(s) over a 24 month period and either depreciated under Accelerated Cost Recovery System (ACRS):


Cost of Acquisition: Appraised Value: Date of Appraisal: Appraisal Ordered by:

F. Is the project the subject of a Historic Rehabilitation Tax Credit? Yes No

20% Historic Credit 10% Historic Credit

If yes: Amount: $ Has the amount of Historic Tax Credit been deducted from the Eligible Basis for Low Income Housing Tax Credits? Yes No

Is the property listed in the National or State Register of Historic Places? Yes No

Please provide the current status of the project as it pertains to the Historic Tax Credits.

IV. Tax-exempt Bond Financing:

Is Taxable Bond Financing used? Yes No

If yes, enter $

The Tax-exempt Bonds are (check one) from the Private Activity Volume Cap Government Obligation Bonds

501 ( c ) 3 Bonds Other:

Who is the issuer? What is the status of the issue?7

The percentage of the tax-exempt financing to the total cost of project. %.

7 Provide a summary of the status of the award of Tax-exempt Private Activity Volume Cap for this project. If Tax-exempt Private Activity Volume Cap has not been awarded, provide a status of the application and a summary of the award process. Also provide a schedule summarizing milestone in issuance and closing of the Tax-exempt bond.


LOW INCOME HOUSING TAX CREDIT PROGRAMCERTIFICATION

MINIMUM SET-ASIDE ELECTION

By way of signature below, the applicant hereby agrees that if it is allocated the low-income housing tax credits applied for herein, it shall maintain as low-income housing units for a total of years (minimum 15 compliance period + 15 year additional use period) the minimum set-aside [42(g)(1), IRC; 15-313-8(b)(11), HAR] irrevocably elected as checked (check one only):

1. % (minimum 20%) of the rental residential units in this project will be both rent-restricted and to be occupied by individuals whose income is 50% or less of area median income, or

2. % (minimum 40%) of the rental residential units in this project will be both rent restricted and to be occupied by individuals whose income is 60% or less of the area median income, or

3. % of the rental residential units in this project will be both rent-restricted and to be occupied by individuals whose income is % or less of area median income, and

% of the rental residential units in this project will be both rent restricted and to be occupied by individuals whose income is % or less of the area median income, and

EXTENDED USE AGREEMENT ELECTIONBy way of signature below,

The applicant hereby agrees that if it is allocated the low-income housing tax credits applied for herein to an extended use period of: years, collectively consisting of a compliance period of 15 years and an additional use period of years.

WAIVER OF QUALIFED CONTRACTThe applicant hereby agrees that if it is allocated the low-income housing tax credits applied for herein waive its right to exercise a request for a qualified contract pursuant to Section 42(h)(6)(E)(i)(II).

DEVELOPER FEE ELECTION

By way of signature below, the applicant hereby agrees to limit developer fees, as defined in the prevailing Qualified Allocation Plan to % of the total development cost as specified in the application equal to $ .


NON-PROFIT SET-ASIDE ELECTIONBy way of signature below,

The applicant hereby elects to accept an allocation of Low Income Housing Tax Credit from the State’s Non-profit set-aside.

The applicant hereby elects to accept an allocation of Low Income Housing Tax Credit outside of the State’s Non-profit set-aside.

FORECLOSURE/DEED IN LIEU OF FORECLOSURE

Has any Low Income Housing Tax Credit project owned by any member of the development team been foreclosed upon or had a deed in lieu of a foreclosure? For application purposes, development team includes, but is not limited to the General Partner, Co-General Partner, Administrative General Partner, etc. of the Project’s ownership entity. For LLC’s, the development team would include the Managing Members, Administrative Managing Members, etc. HHFDC reserves the right to include other related entities.

Yes

No

If yes, please complete the following:

Project Name Date of Foreclosure/Deed in Lieu of Foreclosure

Project Location (City & State)

Reason for Foreclosure/Deed in Lieu

Member of Development Team


LOW-INCOME HOUSING TAX CREDITS RECAPTURE:

Has any member of the development team had Low-Income Housing Tax Credits recaptured? For application purposes, development team includes, but is not limited to the General Partner, Co-General Partner, Administrative General Partner, etc. of the Project’s ownership entity. For LLC’s, the development team would include the Managing Members, Administrative Managing Members, etc. HHFDC reserves the right to include other related entities.

Yes

No


Project Name Date of Recapture Project Location (City & State)

Reason for Recapture: Member of Development Team

REPLACEMENT OF GENERAL PARTNER

Has the General Partner (includes Co-General Partner and Administrative General Partner) or Managing Member of any Low-Income Housing Tax Credit project that any member of the development team worked on been replaced?

Yes

No


Project Name Date General Partner or Managing Member was Replaced

Project Location (City & State)

Reason General Partner or Managing Member was Replaced

Name of Development Team Member


AWARDING OF CREDITS/RESTRICTIVE COVENANT DOCUMENT

Each application will be ranked and tax credits awarded to the applicants according to the Qualified Allocation Plan and as determined by the HHFDC.

A Restrictive Covenant Document must be executed and recorded prior to the release of the IRS Form 8609 allocating the taxpayer the low-income housing tax credits. This document in draft form is available for review from the HHFDC. This document will be revised to reflect any representations made by the applicant herein, specifically in regards to the number of years that the project will be kept in low-income housing tax credit use.

COMPLIANCE MONITORING

The HHFDC shall monitor compliance with all applicable Federal and State Program requirements for the period a project is committed to providing low-income rental units. The HHFDC will require that all qualified tenants of a project be certified upon occupancy and be recertified annually to ensure compliance. Projects shall be required to maintain copies of the income certification for each tenant on forms approved or provided by the HHFDC. The HHFDC may perform an audit at least once a year, but shall have access to all books and records upon notice to the project owner. If the HHFDC becomes aware of non-compliance, the Internal Revenue Service shall be notified in accordance with federal and state regulations.

FEES

1. The application fee is $1,500. This fee is non-refundable. [§15-313-13(a), Hawaii Administrative Rules]2. Upon allocation of the federal and state tax credits, 10 percent of the first year’s federal tax credit amount

shall be delivered to the HHFDC as a good faith deposit, at the time the executed Binding Agreement is submitted to the HHFDC. Upon issuance of the IRS Form 8609, 40 percent of the deposit shall be refunded to the applicant, and 60% shall be retained by the HHFDC as an administrative fee. [§15-313-10(f), HAR]

3. A compliance monitoring fee of up to $25 per unit per year will be assessed. This amount is subject to change and may be adjusted annually. See the HHFDC Compliance Monitoring Procedures in the Allocation Plan and the HHFDC Compliance Monitoring Manual for further information. [§15-313-13(b), HAR]


CERTIFICATION

The undersigned is responsible for ensuring that the project consists or will consist of a qualified low-income building or buildings as defined in the Internal Revenue Code, Section 42, and will satisfy all applicable requirements of federal tax law in the acquisition, rehabilitation, or construction and operation of the project to receive the low-income housing credit.

The undersigned is responsible for all calculations and figures relating to the determination of the eligible basis for the project and understands and agrees that the amount of the credit is calculated by reference to the figure submitted with this application, as to the eligible basis and qualified basis of the project and individual buildings.

The undersigned hereby makes Application to the State of Hawaii for the allocation of low-income housing tax credits or for a carryover allocation, the dollar amounts as listed in the application. The undersigned agrees that the HHFDC will at all times be indemnified and held harmless against all losses, costs, damages, expenses and liabilities whatsoever nature or kind (including, but not limited to attorney’s fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgment, any loss from judgment from the Internal Revenue Service) directly or indirectly resulting from, arising out of, or related to acceptance, consideration and approval or disapproval of such allocation request.

The undersigned hereby agrees and allows the release of any and all information to the HHFDC in regards to the representations made within this application. Such information may include credit history and ratings verifications, confirmation of involvement in past developments, and all other information as may be required by the HHFDC. This information will be used solely by the HHFDC to aid in making a determination as to the awarding of low-income housing tax credits to the applicant and will not be disclosed outside the agency except as required and permitted under law.

The undersigned, being duly authorized, hereby represents and certifies that the foregoing information, to the best of his/her knowledge, is true, complete and accurately describes the proposed project.

In Witness Whereof, the applicant has caused this document to be duly executed in its name on the day of , 20 .

APPLICANT

________________________________

By:

Its:


STATE OF HAWAIILOW-INCOME HOUSING TAX CREDIT PROGRAM

2016/2017 QUALIFIED ALLOCATION PLAN

Table of Contents

I. Introduction..............................................................................................................................2

II. Application and Award Process...............................................................................................3

III. Selection Criteria......................................................................................................................4A. Policy:...............................................................................................................4B. Minimum Thresholds:.....................................................................................4C. Low Income Housing Tax Credit project financed with Tax-exempt Bonds:8D. Criteria Point System:.....................................................................................9

IV. Rights of the HHFDC.............................................................................................................21

V. Fees 22

VI. Compliance Monitoring Plan.................................................................................................23A. Summary........................................................................................................23B. Compliance....................................................................................................24C. Qualifying Households..................................................................................26D. Rent and Income Limits................................................................................28E. Eviction of Tenants........................................................................................28F. Audits.............................................................................................................28G. Rural Housing Service (RHS) and Tax-exempt Bond Issue Projects...........29H. Reporting Requirements................................................................................30I. Fees.................................................................................................................30J. Non-compliance Penalties..............................................................................31K. Additional Use Period....................................................................................31

VII. Other 33

VIII. Qualified Contracts................................................................................................................33

Appendix 1 ....................................................................................................................................37

2016/2017 Qualified Allocation Plan March 2016Hawaii Housing Finance and Development Corporation Page 1

STATE OF HAWAIILOW-INCOME HOUSING TAX CREDIT PROGRAM

2016/2017 QUALIFIED ALLOCATION PLAN

I. Introduction

The Low-Income Housing Tax Credit (LIHTC) Program, created by the Tax Reform Act of 1986, is intended to encourage the construction or rehabilitation of low-income rental units. The regulations which govern this Program are contained in Section 42 of the Internal Revenue Code (IRC). This Program provides Federal LIHTC to qualified project owners who agree to maintain all or a portion of a project’s units for low-income individuals or families. The State of Hawaii created a State LIHTC which is equal to fifty percent (50%) of the Federal LIHTC allocated to a project. The Hawaii Housing Finance and Development Corporation (HHFDC) has been designated as the agency responsible for the administration of both Federal and State LIHTC Programs for the State of Hawaii.

In accordance with Section 42 of the IRC, the HHFDC developed this Qualified Allocation Plan (QAP) which sets forth (1) the criteria to evaluate and allocate LIHTC to projects which best meet the housing needs of the State and preferences required by Section 42 of the IRC, and (2) the procedure to monitor for compliance with the provisions of the LIHTC Program.

This allocation plan shall be effective for reservations and awards of LIHTC for the calendar year 2016 and 2017. The QAP is subject to amendment by the HHFDC Board of Directors.


II. Application and Award Process

Applications for the LIHTC are available at the HHFDC’s office or by submitting a written request to the HHFDC at the address shown below.

Hawaii Housing Finance and Development Corporation677 Queen Street, Suite 300Honolulu, Hawaii 96813ATTN: Finance Branch

(808) 587-0567

Applications for LIHTC should be submitted to the HHFDC no later than the indicated deadline. Upon receiving an application for LIHTC, the HHFDC shall review the application to ensure that the application is complete and contains all required information. The Executive Director shall have the right to defer the consideration of any application if, in his/her sole discretion, such deferral is deemed in the best interests of meeting housing needs.

Complete and accepted applications shall then be evaluated in accordance with the allocation plan to determine the project’s rank in relation to other projects in the evaluation. Projects receiving the highest ranking shall then be further evaluated to determine the minimum amount of LIHTC required to make the project feasible. The amount of LIHTC reserved or allocated to a particular project will be limited to the minimum amount the HHFDC, in its sole discretion, deems necessary to make the project feasible.

The allocation plan utilizes a point system to facilitate project ranking based on the established evaluation criteria. The point system is an important component in determining project ranking. However, the point system may not be the sole determining factor for LIHTC awards. In addition to the point system, HHFDC may consider other relevant factors that it deems to be in the best interest of affordable housing the State of Hawaii, including, but not limited to:

1. Development team experience and performance;2. Financial condition and performance;3. Related developments;4. Development timing;5. Tenant health and safety;6. “At-risk” conversions;7. Housing inventory;8. Affordable housing policies at the State and County levels;9. Development and operating budgets; and10. Market conditions.


III. Selection Criteria

It is HHFDC’s intent to maximize the use of the State’s limited resources to address the substantial need for rental homes that are accessible and affordable to Hawaii’s low-income households. Emphasis is placed on serving lower income people and on efficiently leveraging LIHTCs and other HHFDC financing resources to increase and sustain the supply of affordable rentals in communities that are suitable for such development.

A. Policy:

1. 9% (volume cap) LIHTC to be used for the following:a. New constructionb. Rehabilitation of existing inventory but excluding acquisition costs of real estate,

buildings, and depreciable assets from eligible basis (no acquisition LIHTC).

2. No more than one (1) acquisition/rehabilitation project may be awarded 9% (volume cap) LIHTC per calendar year.

3. Project owner/applicant must be established and registered with the State of Hawaii.

B. Minimum Thresholds: Applicants must meet all of the following Minimum Threshold requirements to receive consideration for an allocation or award of LIHTC.

Failure to meet any Minimum Threshold shall result in the immediate rejection of the application.

Minimum Thresholds are subject to verification by HHFDC. See Section IV – Compliance with Commitments and Representations.

1. Market StudyA comprehensive Market Study of the housing needs of low-income individuals in the area to be served by the project by a disinterested party must be submitted as part of this application. The Market Study shall be completed at the Owner’s expense. Any application failing to submit a Market Study or submitting a Market Study dated over 6 months from the time of application will not be considered for an award of LIHTC.

Market Study requirements are specified in Appendix 1.


2. Site ControlTo receive consideration for an award of LIHTC, the applicant must have control of the site in a form acceptable to the HHFDC. Evidence of site control shall be submitted with the application for LIHTC. Site control shall be substantiated by providing evidence in the form of an executed lease or sales option agreement, fee simple deed, executed land lease, or any other documentation acceptable to the HHFDC. Evidence of site control must be provided for all proposed sites.

All lease terms must extend a minimum of 5 years past the affordability commitment period.

3. Capital Needs Assessment (For projects acquiring an existing property. All units need to be reviewed.)To ensure that the proposed rehabilitation of the project is adequate and that the property will have a useful life that exceeds the compliance and additional use period (collectively the Extended Use Period). A capital needs assessment of the property by a competent third party shall be submitted with the application. A capital needs assessment is a qualified professional’s opinion of a property’s current physical condition. It identifies deferred maintenance, physical needs and deficiencies, and material building code violations that affect the property’s use, structural and mechanical integrity, and future physical and financial needs. The Capital Needs Assessment shall identify any work that must be completed immediately to address health and safety issues, violation of Federal or State law, violation of local code, or any work necessary to ensure that the building can continue to operate as affordable housing.

4. Public Housing Waitlist/Homeless Services ProgramsApplicant shall certify that all low-income units will be made available to people on the waiting list for low-income public housing and/or an acceptable shelter program. The following shall be submitted with the application: a. Public Housing Waitlist/Homeless Services Certification (refer to exhibit list of

the Consolidated Application).b. Copy of the letter submitted to the local public housing authority which

administers the public housing waiting list (refer to exhibit list of the Consolidated Application).

c. Copy of the letter submitted to the Department of Human Services, Homeless Programs Office (refer to exhibit list of the Consolidated Application).


5. Smoke FreeAll projects will be smoke free. Owners must prohibit smoking in all indoor common areas, individual living areas (including balconies and lanais), and within 25 feet of building entries or ventilation intakes. A non-smoking clause must be included in the lease for each household. Submit certification (refer to exhibit list of the Consolidated Application).

6. Contractor Profit Limitationa. Contractor’s profit, including general requirements and overhead, shall not

exceed 14.0% of hard construction costs.i. Contractor General Requirements include insurance, security, fencing,

etc.b. The Project shall evidence compliance with this section at application through

Exhibit A – Project Cost Breakdown Worksheet of the Consolidated Application.

c. The Project shall evidence compliance with this section at project completion through the audited final cost certification.

d. The contractor profit limitation is a requirement of the developer and the contractor.

e. Contractor Profit Percentage is calculated as follows:i. Contractor Profit (numerator) is the sum of the following items on

Exhibit A: Site Work: Contractor Profit Site Work: Contractor Overhead Site Work: Contractor General Requirements New Building/Rehabilitation: Contractor Profit New Building/Rehabilitation: Contractor Overhead New Building/Rehabilitation: Contractor General Requirements

ii. Construction Costs (denominator) is the sum of the following items on Exhibit A: Site Work: Cost New Building/Rehabilitation: Cost Excluding Contractor Profit for Sitework and New

Building/Rehabilitationiii. Contractor Profit Percentage is Contractor Profit divided by hard

Construction Costs and shall not exceed 14.0%iv. If there are multiple prime contractors, each contractor’s profit, including

general requirements and overhead, shall not exceed 14.0% of the hard construction costs for that contract.


7. Debt Service Ratioa. Project with hard debt service requirements with or without an application for

an RHRF Project Award Loan:i. The Project is required to evidence a Debt Service Ratio of no less than

1.15x on all hard debt service requirements for the duration of the initial 15-year LIHTC compliance period. Applicants may underwrite an RHRF Project Award based on required terms, including cash flow contingent payments.

b. Projects with no hard debt service requirements and applying for an RHRF Project Award Loan:i. The Project is required to evidence a Debt Service Ratio of no less than

1.15x on the requested RHRF loan for the duration of the amortization period. The Applicant is required to use the following assumptions in underwriting the RHRF loan:1. Interest Rate: Long-Term Applicable Federal Rate in effect for

the month the Consolidated Application is released.2. Amortization: Full Amortization over 35 years.

c. Projects with no hard debt service requirements and not applying for an RHRF Project Award Loan:i. The Project is required to evidence positive Net Operating Income

throughout the 50-year proforma period in the Consolidated Application.d. Hard Debt Service:

i. Defined as scheduled regular and periodic principal and/or interest payments of project loan obligations made for its direct benefit, as evidenced by a note and loan agreement.

ii. The Applicant is required to support all hard debt service loans and terms with executed lenders’ commitment letters, letters of interest, or term sheets under Exhibit 27 of the Consolidated Application.

e. Underwriting Criteria and Requirements:i. The Project shall evidence compliance with this section through Exhibit

E – Operating Proforma of the Consolidated Application.ii. Applicants are required to use the following parameters and assumptions

in the preparation of Exhibit E:1. Annual Income Inflation Rate of 2.0% and Annual Expense

Inflation Rate of 3.0% for the first 15 years or term of the first mortgage, whichever is greater.

2. Annual Expense Inflation Rate of 2.0% and Annual Expenses Inflation Rate of 2.0% for the remaining term of affordability.

3. Vacancy Rate of no less than 5.0%4. Annual Replacement Reserve Allocation of no less than $300

per unit per year.

8. Phase I Environmental AssessmentRequired for all applications.For acquisition/rehabilitation projects, the Phase I Environmental Assessment should address lead based paint and asbestos.


9. Proof of Non-Profit StatusIf applying under the Federal non-profit set aside, submit the following:a. Articles of Incorporation b. Copy of a current 501(c)(3) IRS Tax Exemption Letter

10. Developer Fee - Developer Fee includes developer fee, developer overhead, management fee, consultant fee, etc. (as indicated in the Developer Fee section of Exhibit A of the Consolidated Application).a. 9% (volume cap) LIHTC:

i. New Construction – maximum developer fee of 15% of the total development costs (excluding developer fee) or $3,750,000 (whichever is less).

ii. Acquisition/Rehabilitation – maximum developer fee of 10% of the acquisition costs and 15% of the rehabilitation costs (excluding developer fee) or $3,750,000 (whichever is less).

b. 4% (non-volume cap) LIHTC: i. Maximum developer fee of 15% of the total development costs

(excluding developer fee) if the applicant waives its right to a qualified contract.

ii. Maximum developer fee of 5% of the total development costs (excluding developer fee) or $250,000 (whichever is less) if the applicant does not waive its right to a qualified contract.

11. Minimum Affordability Period:a. Applicants requesting an award of 4% LIHTC must commit to a minimum

affordability period of 45 years.b. Acquisition/Rehabilitation applicants: affordability period must also exceed any

pre-existing affordability period by no less than 30 years.

12. 4% LIHTC Developer Experience: a. Minimum of one (1) LIHTC project Placed In Service by the Project Owner

(General or Co-General Partner/Managing or Co-Managing Member).b. Minimum of one (1) LIHTC project currently managed by the Management

Agent.

C. Low Income Housing Tax Credit project financed with Tax-exempt Bonds:Projects financed with tax-exempt private activity bonds may qualify for LIHTC in excess of the State’s volume cap. Applicants may apply for an allocation of LIHTC with a commitment to issue private activity bonds from a state or local government. Applicants may submit an application for an allocation for LIHTC concurrently with an application for Private Activity Tax-exempt bonds from the HHFDC.

Applicants requesting LIHTC must submit all documentation required in the application and will be subject to all feasibility reviews as required for an application for LIHTC from the State’s volume cap, with the exception of scoring under the Criteria Point System.


D. Criteria Point System:Each application will be evaluated and awarded points in accordance with the following criteria. Unless otherwise indicated, all references to low-income unit(s) or low-income rental unit(s) shall mean LIHTC unit(s).

CRITERIA POINTS

1. LIHTC Resource Efficiency – Use and Leverage. 0-9

2. County Income Adjuster 0-4

3. Overall project feasibility. 0-22

4. The ratio of developer fee as a percentage of total project cost. 0-7

5. Project will be receiving project-based rental assistance subsidies for the first time. 0-7

6. State/Local Government Support. 0-6

7. Energy Efficient and Green Building. 0-4

8. Project location and market demand. 0-6

9. Developer experience. 0-7

10. Project will provide low-income units for a longer period than is required under Section 42 IRC.

0-7

11. Project will give preference to tenant populations. 0-2

12. Project serving tenants with special housing needs. 0-2

13. Project will provide a greater percentage of low-income units than required under Section 42 IRC.

0-10

14. Project is participating with a local tax-exempt organization and is sponsored by a qualified non-profit, as defined in Section 42 IRC.

0-3

15. Projects offering tenants an opportunity for home ownership. 0 or 1

16. Project is located in qualified census tract, the development of which contributes to a concerted community revitalization plan as determined by HHFDC.

0 or 2

17. Historic Nature. 0 or 1

18. Waiver of Qualified Contract 20

* Refer to narrative section for more details.


Criterion 1LIHTC Resource Efficiency Use and Leverage 0 to 9 points

1A – LIHTC UseThe ratio is derived as: “Total Federal Tax LIHTC Requested (Annual)/Total Number of Proposed LIHTC Units”

Annual LIHTC / LIHTC Unit PointsMultiplier x Max Pts = Pts. Awarded

Ratio ≥ $24,000 (0/9) x 5 = 0.00$24,000 > Ratio ≥ $22,000 (1/9) x 5 = 0.56$22,000 > Ratio ≥ $20,000 (2/9) x 5 = 1.11$20,000 > Ratio ≥ $18,000 (3/9) x 5 = 1.67$18,000 > Ratio ≥ $16,000 (4/9) x 5 = 2.22$16,000 > Ratio ≥ $14,000 (5/9) x 5 = 2.78$14,000 > Ratio ≥ $12,000 (6/9) x 5 = 3.33$12,000 > Ratio ≥ $10,000 (7/9) x 5 = 3.89Ratio < $10,000 (9/9) x 5 = 5.00

1B – LIHTC LeveragingThe ratio is derived as “Total Federal Tax LIHTC requested (annual multiplied by ten years)/Total Project Cost”

Total LIHTC / Total Project Cost PointsMultiplier x Max Pts = Pts. Awarded

Ratio ≥80.00% (0/6) x 4 = 0.0080.00% > Ratio ≥ 70.00% (1/6) x 4 = 0.6770.00% > Ratio ≥ 60.00% (2/6) x 4 = 1.3360.00% > Ratio ≥ 50.00% (3/6) x 4 = 2.0050.00% > Ratio ≥ 40.00% (4/6) x 4 = 2.67Ratio < 40.00% (6/6) x 4 = 4.00

Criterion 2County Income Adjuster.Applicants receive points under this criterion based on the MTSP income limits as determined by HUD for the county in which the project is located.

HHFDC shall use the 60%, 4 person income limit for determining point allocations between the counties as follows:

County based points are 0 to 4 rounded to the nearest hundredth (0.00) based on the lowest income limit. The county with the lowest limit receives 4 points while the county with the highest income limit receives 0 points. Points for the remaining counties are based on their proximity between the highest and lowest income limits. Please see example below based on the 2015 income limits.


Honolulu County (Oahu) Hawaii County Kauai County Maui County

2015 MTSP Income Limit

$ 40,920.00

$ 57,480 $ 40,920 $ 51,780 $ 46,020

Lowest Income Limit

Project's Difference from Lowest Ratio 16560 0 10860 5100

Range Between Lowest & Highest Ratio $ 16,560

Maximum Points Available $ 4

Range Value Per Point

Project Points AvailableDeduction Based On Difference from Lowest Ratio (Project's Difference / Range Value Per Point)

$ 4,140

4.00 4.00 4.00 4.00

4.00 0.00 2.62 1.23

Net Points Scored 0.00 4.00 1.38 2.77

Criterion 3. Overall Project Feasibility.The points awarded will be based on HHFDC’s evaluation of any and all factors that could impact overall project feasibility, including, but not limited to the following factors:

Reasonableness of development costs (“RDC”). 0 to 9 points

Acquisition/Rehabilitation Projects receive zero (0) points under RDC.

New construction projects8 will be ranked and scored as follows:

A. 9% LIHTC Projects1. Projects will receive 0 to 4.5 points (rounded to the nearest 0.00) based upon the

lowest total development cost (without land) per gross building square foot, as follows:a. The project with the lowest total development cost (without land) per

gross building square foot will receive 4.5 points;b. Other projects will receive a percentage of the 4.5 points based upon the

subject project cost’s percentage variation from the lowest cost, e.g., if the subject project cost is 15% higher than the project with the lowest cost, the subject project will receive 4.5 points less 15% of 4.5 points = 3.83 points;

c. By this formula, projects with a total cost that are twice or more times the lowest total cost will receive zero (0) points, e.g., if the subject project cost is 100% higher than the lowest cost, the subject project will receive 4.5 points less 100% of 4.5 points = 0 points.

8 9% and 4% projects will be reviewed separately.2016/2017 Qualified Allocation Plan March 2016Hawaii Housing Finance and Development Corporation Page 11

2. Projects will receive 0 to 4.5 points (rounded to the nearest 0.00) based upon the lowest total development cost (with land) per unit, as follows:a. The project with the lowest total development cost (with land) per unit

will receive 4.5 points;b. Other projects will receive a percentage of the 4.5 points based upon the

subject project cost’s percentage variation from the lowest cost, e.g., if the subject project cost is 20% higher than the project with the lowest cost, the subject project will receive 4.5 points less 20% of 4.5 points = 3.60 points;

c. By this formula, projects with a total cost that are twice or more times the lowest total cost will receive zero (0) points, e.g., if the subject project cost is 100% higher than the lowest cost, the subject project will receive 4.5 points less 100% of 4.5 points = 0 points.

B. Total development costs (with, and without land, as applicable) of mixed-use projects with substantial non-residential use (including public and commercial uses) with its own non-HHFDC financing, may be evaluated without the non-residential component by proportionately reducing the total development costs based upon the gross floor area of the non-residential, and excluding the gross floor area of the non-residential use from the gross building area. For mixed income projects with a substantial number of units not being financed by LIHTC, the cost and area of these units may be discounted if the applicant can provide a clear and reasonable cost breakdown for the units not considered affordable under this program.

Applicant’s readiness to proceed with development of project. 0 to 10 points

Identification of serious issues in need of resolution for the project to proceed in a timely manner and the ability of the Development Team to resolve these issues such that the development of the Project will commence in a timely manner. (For example, lack of adequate financing sources; land use and zoning issues; or utility, water, and sewer availability.)

A. Is the project schedule reasonable for the proposed development? Are there any unresolved development issues, e.g., are there restrictions on water or sewer availability? Are there any issues with the project budget, e.g., is the budget adequate? (2 points)

B. Are there any discretionary approvals outstanding, e.g., land use, zoning, EA/FONSI, SMA, Corps of Engineers? (6 points)


C. Are there any ministerial approvals outstanding, e.g., subdivision?Have the construction drawings been completed and under review by the approving agencies? For existing projects, have all of the necessary studies been completed, e.g., hazardous waste assessments? (2 points)

Tenant Services and Amenities. 0 to 3 points

Tenant services and amenities that will enhance the livability of the project

Criterion 4. The applicant elects to limit the total Developer Fee as a percentage of the total development cost (excluding developer fee) as presented in the application. The Developer Fee includes total fees paid to the Developer, including, but is not limited to, consulting fees, project management fees, developer overhead, and developer fees. Architectural, Engineering, Accounting, and Legal fees are not included as the Developer Fee.

Developer Fee is subject to a maximum threshold cap. Please refer to Section III (B) (10) for details. Exceeding of this threshold cap results in immediate rejection of the application.

Applicants receive scores for this criterion based on the table below. Please note the different categories for New Construction vs. Acquisition / Rehabilitation applications.

9% LIHTC Applicants:New Construction Acquisition / Rehabilitation

Fee on Acquisition Fee on RehabilitationFee Points Fee Points Fee Points15% > Fee ≥ 13% 0 10% > Fee ≥

8%0 15% > Fee ≥ 13% 0

13% > Fee ≥ 11% 1 8% > Fee ≥ 7% 1 13% > Fee ≥11% 111% > Fee ≥ 9% 2 Fee < 7% 3 11% > Fee ≥9% 29% > Fee ≥ 7% 3 Fee < 9% 47% > Fee ≥ 6% 5Fee < 6% 7


Criterion 5. Project will be receiving, for the first time, project-based rental assistance subsidies which would result in eligible tenants paying approximately 30% of their gross monthly income towards rent. Eligible programs shall include, but not be limited to, the Rural Development 515 Loan Program and HUD Section 8 project-based Rental Assistance Program.

If the answer to the question is NO 0 points are awarded

If the answer to the question is YES 1 to 7 points are awarded*

* If all the units in the project have project based subsidies then 7 points is awarded, if only a portion of a project has project based subsidies, then the scoring will be adjusted based upon the percentage of units subsidized. The percentage is derived as “Number of Subsidized Units / LIHTC and non-LIHTC subsidized units,” provided they are developed simultaneously.

Criterion 6.State/Local government support. The project will be receiving a permanent below market loan or grant from a State or local governmental agency other than HHFDC or a lease from a government agency (including HHFDC).

The project has received a commitment for a permanent below market loan, or grant, or a commitment of less than 10% of the total development cost. A copy of a commitment letter, government action or contractual agreement must be included in the application. 3 points

The project has received a commitment for a permanent below market loan, or grant, or a commitment of greater than 10% of the total development cost. A copy of a commitment letter, government action or contractual agreement must be included in the application. 6 points

The project has received a lease from a government agency (including HHFDC). Applicants will receive a percentage of the 3 points based upon the ratio of the square footage of the leased land to the total square footage of the project site. For example, if the square footage of the leased land is 50% of the total square footage of the project site, the applicant will receive 1.5 points. Up to 3 points

The highest award possible is 6 points.


Criterion 7.Projects which promote smart growth, energy, and water conservation, operational savings and sustainable building practices in affordable housing design may be awarded up to 4 points as follows:

Projects can score points in only one category. If an applicant attempts to elect more than one category, the project shall not receive any points in this criterion.

Applicants must submit a certification from the architect confirming that the Project can meet the required building standards for the category selected below (refer to exhibit list of the Consolidated Application). For example, if an applicant selects LEED Gold, the architect must certify that the Project can meet the LEED Gold standard. If the certification is missing or if the architect’s certification does not reconcile with the applicant’s election, the Project shall not receive any points in this criterion.EPA Energy Star v.3 Enterprise Green

CommunitiesUSGBC LEED for Homes – v4 HD&C

National Green Building Standard (NAHB)

No. Points

X Certified Certified Bronze 1Silver Silver 2Gold Gold 3Platinum Emerald 4

http://www.energystar.gov/index.cfm?c=new_homes.hm_index

http://www.enterprisecommunity.com/solutions-and-innovation/enterprise-green-communities

http://greenhomeguide.com/program/leed-for-homes

http://www.nahbgreen.org/NGBS/default.aspx

Upon completion of the project, a certification from a third party, architect, or engineer verifying the green building practices listed above have been used to construct or rehabilitate the building shall be submitted. Failure to provide the certification may result in forfeiture of the good faith deposit.

Criterion 8. Project location and market demand. 0 to 6 points

The points awarded will be based on HHFDC’s evaluation of factors such as, but not limited to:

Project is located in a county’s urban core/district (preference) versus rural district and is accessible to employment opportunities and shopping; and recreational, medical and educational facilities are located in the immediate vicinity of the project site.


http://www.nahbgreen.org/NGBS/default.aspx

http://greenhomeguide.com/program/leed-for-homes

http://www.enterprisecommunity.com/solutions-and-innovation/enterprise-green-communities

http://www.energystar.gov/index.cfm?c=new_homes.hm_index

Criterion 9. Developer and Property Management Experience. 0 to 7 points

Applicants receive scores for this criterion based on the following:

1. Number of LIHTC Placed In Service by the Project Owner (General Partner/Managing Member/Developer);

Projects Placed in Service PointsNone 01 – 5 16+ 2

2. Number of LIHTC Placed In Service in Hawaii by the Project Owner (General Partner/Managing Member/Developer);

Projects Placed in Service PointsNone 01 – 3 14+ 2

3. Number of LIHTC projects managed by the Management Agent;

Projects Managed PointsNone 01 – 5 1


Located in a County’s urban core 4 pointsLocated in an urbanized area 3 pointsLocated in a master planned community 2 pointsLocated in a rural district in proximity to employment opportunities and medical and educational facilities

1 point

Project may earn two additional points for availability of a mass transit station/stop within ½ mile. For Oahu, the term “mass transit” is exclusive to rail. For the neighbor islands, the term “mass transit” is not exclusive to rail.

2 points

6+ 2


4. Number of LIHTC project located in the State of Hawaii managed by the management Agent:;

Projects Managed PointsNone 01+ 1

Criterion 10. Applicants electing to commit to an additional use period beyond the initial 15-year LIHTC compliance period (collectively the Extended Use Period) will be awarded points based on the table below. The election will be recorded in the Restrictive Covenant Document.

Points will be awarded based on the following:

Total Extended Use Period (Total Length of Affordability Commitment):

Points

61 years or more 7 points55 to 60 years 4 points50 to 54 years 3 points45 to 49 years 2 points40 to 44 years 1 pointLess than 40 years 0 points

Criterion 11.An Applicant will receive up to 2 points if it elects to provide affordable housing that provide larger units which are available to individuals with children or large families.

Projects providing units that are 2-bedrooms or larger for at least 20% of all low-income units may earn 1 to 2 points according to the following schedule:

20% to 39% of the total units 1 point

40% or more of the total units 2 points


Criterion 12.Project will provide housing for tenant populations with special housing needs.

For the purpose of this Qualified Allocation Plan, “special housing needs” mean persons for whom social problems, age or physical or mental disabilities impair their ability to live independently, and for whom such ability can be improved by more suitable housing conditions. Persons with special housing needs may include persons with physical or mental disabilities or persons who are homeless.

Projects may receive up to 2 points for the criterion if it commits to provide services that will enhance the livability of the project for tenant populations with special housing needs. The amount of points awarded is based on the quantity and quality of services provided and the status of commitment. The maximum 2 points will be awarded only to applicants that have an executed commitment to serve this project by a third party service provider or if applicant or owner is an experienced provider of the proposed services.

All such services shall be optional to the tenant and shall be provided at no additional cost to the tenant.

Projects must substantiate the feasibility of providing these services throughout the compliance period as part of its application. The owner shall certify the feasibility of the services provided in the application accompanied by supporting documentation during the compliance period.

Market Study must include an analysis of market demand for tenants with special housing needs.

Projects that commit to provide housing for tenants populations with special housing needs will be required to have those units occupied by the special housing needs tenants. The Declaration of Restrictive Covenants for Low Income Housing Credits will restrict the occupancy of the units to the special housing needs tenants for the duration of the committed affordability period. For example, if a projects commits 10 of the 60 LIHTC units for special housing needs tenants, those units shall be occupied at all times by a special housing needs tenant. The unit shall remain vacant until a special housing needs tenant occupies the unit regardless of whether there is a waitlist for the project for the other remaining units.


Criterion 13. Applicants receive points by providing a preference to lower income tenants in accordance with the table below. Projects may score multiple times under the Percent of Income Targeted Units” category (i.e. electing 80% of LIHTC units at 50% AMGI and 20% of LIHTC units at 30% AMGI for 10 points). However, projects may only score once under a specific “Area Median Income” category (i.e. if 70% of LIHTC units at 50% AMGI is elected, the project cannot elect 30% of LIHTC at 50% AMGI to account for 100% of LIHTC units). The highest award possible is 10 points.

Version C-4

Percent of AreaMedian Income

60% 50% 40% 30%

Perc

ent o

f Inc

ome

Targ

eted

Uni

ts to

Tot

al

LIH

TC U

nits

80% 6.25 7.75 9 1070% 5.25 6.75 8 960% 4.25 5.75 7 850% 3.25 4.75 6 740% 2.25 3.75 5 630% 1.25 2.75 4 520% 0.25 1.75 3 410% 0 0.75 2 3

Please see example scoring under this criterion below:

Project60% AMI

50% AMI

40% AMI

30% AMI Points

Alpha

Perc

ent o

f Inc

ome

Targ

eted

Uni

ts to

Tot

al L

IHTC

U

nits

100% 6.25

Bravo 100% 7.75

Charlie 50% 50% 8.

Delta 50% 50% 9.25

Echo 50% 30% 10% 10% 10

Foxtrot 80% 20% 8

Golf 80% 10% 10% 10

The income restrictions shall be included as part of the declaration of land use restrictive covenants based on unit count.


Criterion 14. Project involves a Qualified Non-Profit Organization as defined in Section 42 IRC. The Qualified Non-Profit Organization is to own an interest in the project (directly or through a partnership) and materially participate (within the meaning of Section 469(h) IRC) in the development and operation of the project throughout the Extended Use Period.

In addition, HHFDC requires the following for the project to score points in Criterion 14: 1. Submission of the Articles of Incorporation of the Qualified Non-Profit

Organization2. Copy of a current 501(c)(3) IRS Tax Exemption Letter for the Qualified

Non-Profit Organization3. Most recent Treasury Form 990 with all supporting documentation, as filed

with the IRS4. The Qualified Non-Profit Organization is required to have a physical office

in the State of Hawaii5. Submission of a valid Certificate of Vendor Compliance for the Qualified

Non-Profit Organization indicating the entity is “compliant” or “exempt”.6. One of the exempt purposes of the Qualified Non Profit Organization

includes fostering low-income housing as indicated by Section 42 IRC.

9% LIHTC ApplicantsThe project will elect to receive an allocation from the non-profit set-aside. The owner must comply with the requirement of the non-profit set-aside during the extended use period. There is a Qualified Non-Profit Organization that will have an interest in and material participation in the project throughout the extended use period 3 points

Criterion 15. Project is offering tenants an opportunity for home ownership. The applicant will offer tenants a right of first refusal to acquire the property in accordance with Section 42(i)(7) of the Code. To receive consideration for the criterion, the applicant must provide a feasibility analysis addressing the tenant’s ability to purchase the project. The applicant must also provide a plan discussing how the project will offer the units for homeownership to tenants.


If the answer to the question in YES 1 point


Criterion 16. Project is located in a Qualified Census Tract. The project will redevelop existing housing which contributes to a concerted community revitalization plan as determined by HHFDC. For example: site is located in an Enterprise Community, Empowerment Zone, or part of a County redevelopment plan.


If the answer to the question in YES 2 points

To receive consideration for this criteria, applicant must provide an explanation on how this project is in compliance with such plan and its benefit to the overall community. The applicant must provide a letter of interest or a binding agreement with the government agency administering the community revitalization plan.

Criterion 17.Historic Nature. The project will preserve the historic nature of an existing building. Preservation of building(s) on a national or state historic registry will receive 1 point.


If the answer to the question in YES 1 point

Criterion 18.Waiver of Qualified Contract 20 points

Applicants that elect to waive the right to exercise a request for a qualified contract pursuant to Section 42(h)(6)(E)(i)(II) of the IRC will be awarded 20 points.

IV. Rights of the HHFDC

The HHFDC reserves the right to disapprove any application or project for any LIHTC reservation or allocation, regardless of ranking under the criteria and point system as contained in section III of this allocation plan. The executive director or his/her designated representative shall have the authority to defer consideration of any application if, in his/her sole discretion, such deferral is deemed in the best interest of meeting housing needs.

The HHFDC reserves the right, in its sole discretion, to (i) hold back a portion of the annual state and federal housing credit ceiling for use during later reservation cycles, (ii) carry over a portion of the current year’s housing credit ceiling for allocation to a project which has not yet been placed in service, and (iii) under certain conditions, issue a forward commitment for up to 25% of the next year’s housing credit ceiling.


The HHFDC is required under Section 42 of the IRC to allocate only the minimum amount of LIHTC required to make a project feasible. The determination of the amount of LIHTC to be reserved or allocated to a project shall be made solely at the discretion of the HHFDC. The HHFDC may, at the time of issuance of the IRS Form(s) 8609 for the project, decrease the amount of LIHTC allocated to a project based on the actual cost and financing of the project.

Compliance with Commitments and Representations:1. Projects and Applicants receiving an award of LIHTC are required to comply with their

commitments and representations made under the (i) Consolidated Application and (ii) Qualified Allocation Plan.

2. HHFDC shall verify compliance of the Project and Applicant during its review of the Form 8609 request. The review shall include, but is not limited to, the following:a. Compliance with Contractor Profit and Developer Fee Limitations determined

via the audited cost certification.b. Completion of project improvements in accordance with plans and specifications

determined via architect certification.c. Compliance with Green Building and Energy Efficiency commitments

determined via architect certification or certificate issuance by the appropriate regulating body.

d. Please refer to the request of IRS Form 8609 Issuance for additional information.3. The failure of the Project and Applicant to meet the commitments and representations

shall result in the following:a. Forfeiture of the entire 10% Good Faith Deposit collected during acceptance of

the LIHTC Carryover Allocation or Reservation.

The HHFDC in no way represents or warrants to any interested party which may include, but is not limited to, any developer, project owner, investor or lender that the project is, in fact, feasible or viable.

No member, officer, agent, or employee shall be personally liable concerning any matters arising out of, or in relation to, the reservation or allocation of the LIHTC.

V. FeesThe following fees are associated with the LIHTC program. The HHFDC reserves the right to adjust the fees due to changing circumstances annually each January 1. All fees shall be paid via Cashier’s Check and made payable to the Hawaii Housing Finance and Development Corporation.

Application FeeAn Application Fee of $1,500 per application shall be payable to the HHFDC at the time of submission of the application. The fee shall be the same for all applicants.


Good Faith DepositA good faith deposit of ten percent (10%) of the first year’s federal LIHTC reservation shall be payable at the time the executed binding agreement is submitted to the HHFDC. Upon allocation and issuance of the IRS Form 8609, sixty percent (60%) of the good faith deposit shall be retained by the HHFDC as an administrative fee. The remainder of the good faith deposit may be refunded to the applicant. Failure by Owner to meet any of the elections made in the scoring criteria at the time of application will result in the retention of the entire good faith deposit by the HHFDC. Any said failure shall be determined by HHFDC in its sole discretion.

Compliance Monitoring FeePlease refer to Section VI. Compliance Monitoring Plan for more details regarding the Compliance Monitoring Fee.

Qualified Contract Processing FeeQualified Contract Fee of $150 per unit for all units.

VI. Compliance Monitoring Plan

A. Summary

The HHFDC shall monitor compliance with all applicable Federal and State Program requirements for the period a project is committed to providing low-income rental units. The HHFDC will require that all qualified tenants of a project be certified upon occupancy and be re-certified annually to ensure compliance. Projects shall be required to maintain copies of the income certification for each tenant on forms approved or provided by the HHFDC. Projects will also be required to maintain records regarding number of rental units (including number of bedrooms and size of square footage of each bedroom); percentage of rental units that are low-income units; rent charged on each rental unit including utility allowances; documentation regarding vacancies in the building; eligible and qualified basis of the building at the end of the first year of the credit period, and at the end of each year until required set-asides are met; and character and use of the nonresidential portion of the building that is included in the building’s eligible basis, all in accordance with the rules published by the Internal Revenue Service (IRS). The HHFDC may perform an audit annually but, at a minimum, once every three years, and shall have access to all books and records upon notice to the project owner. Annually, owners of LIHTC projects will be required to certify to HHFDC that for the previous year, the minimum set-aside requirement was met; there was no change in the applicable fraction, or an explanation if there was a change; appropriate income certifications and documentation have been received for each low-income tenant; each low-income unit was rent-restricted in accordance with Section 42 IRC; all units were for use by the general public and used on a non-transient basis (except for transitional housing for the homeless as provided for in Section 42 IRC); each building was suitable for occupancy, taking into account local health, safety and building codes; there was no change in the eligible basis in the project, or an explanation if there was a change; all tenant facilities included in the eligible basis were provided on a comparable basis


without charge; rentals of vacancies were done in accordance with Section 42 IRC; rentals of units were done in accordance with Section 42 IRC if any tenant’s income increased above the limit allowed by Section 42 IRC; and a Restrictive Covenant document was in effect for the project, for those buildings receiving credits after 1989, all in accordance with the rules published by the IRS.

If the HHFDC becomes aware of non-compliance, the IRS shall be notified in accordance with the rules published by the IRS.

Please consult with your tax attorney and/or LIHTC consultant regarding Internal Revenue Code regulations. Owners are responsible for keeping abreast of current Program requirements.

The guidelines outlined below pertain to projects allocated Federal and State LIHTC in the State of Hawaii.

B. Compliance

Owner/Manager TrainingOwners, managing agents, and on-site managers should attend or document that they have recently attended training on management and compliance prior to leasing any units, but no later than receipt of IRS Form 8609, which certifies an allocation of LIHTC. Training may be required following significant or repeated noncompliance events. At minimum, such training should cover key compliance terms, qualified basis rules, determination of rents, tenant eligibility, file documentation, next available unit procedures and unit vacancy rules, agency reporting requirements, record retention requirements, and site visits.

Set AsideThe project must comply with the low-income set-aside requirements of Section 42 IRC as chosen by the owner at the time of receiving the credits. The minimum requirements are either:

1. 20 percent or more of the units in the project are occupied by tenants having a household income of 50 percent or less of the area median gross income (the “20-50 requirement”), or

2. 40 percent or more of the units in the project are occupied by tenants having a household income of 60 percent or less of the area median gross income (the “40-60 requirement”).

Tenant income is calculated in a manner consistent with the determination of annual income under Section 8 of the United States Housing Act of 1937, as directed by the Internal Revenue Code. Area median incomes are determined annually by HUD and are available from the HHFDC.


RentUnits in the project must be rent-restricted to either thirty (30) percent of the median income adjusted for family size for the area in which the project is located or rent-restricted to thirty (30) percent of the imputed income limitations based on unit size. This rent-restriction must be maintained throughout the Term of the Compliance and Extended-use period. See ‘D. Rent and Income Limits’ in this section for further information.

Term of ComplianceProjects receiving a LIHTC allocation after January 1, 1990, must comply with eligibility requirements for the extended use period [initial 15-year period (compliance period), in addition to the 15 or more years (additional-use period)] determined by elections indicated in the Restrictive Covenant Document. The Restrictive Covenant Document must be recorded before credits are allocated.

Annual CertificationThese and other compliance requirements as listed in Section A. Summary must be certified annually by the owner through the submission of the Annual Report. The Annual Report includes the Owner’s Certificate of Continuing Program Compliance and shall be submitted by February 1 of each year throughout the compliance/extended-use period.

Records RetentionThe Annual Report and the supporting documentation verifying the information on the Annual Report must be kept for a minimum of six (6) years after the due date (with extensions) for filing the federal income tax return for that year. The records for the first year of the credit period, however, must be retained for at least 6 years beyond the due date (with extensions) for filing the federal income tax return for the last year of the compliance period of the building, in accordance with published IRS guidelines.

Electronic storage of records is allowed by the IRS. However, HHFDC encourages the retention of hard copies of the first year records.

IRS Form 8609Owner shall complete Part II of the IRS Form 8609 and submit with subsequent Annual Report.

Qualified Basis Tracking Sheet (QBTS)This form shall be submitted annually until the required set-asides are established. Documents will provide information on original tenants qualifying each building for LIHTC minimum set-asides, and other set-asides.


Status ReportsThis report is to be submitted annually by owners in such format as required by the HHFDC or its Authorized Delegate to document and track the continuous compliance of LIHTC units. The documents report data that tenants are income eligible at move-in, that occupants of LIHTC units are re-certified at least on an annual basis, and that the unit rents are restricted. Documentation will also indicate compliance with the vacant unit rule and 140% rule. The tracking of LIHTC units substantiates the maintenance, increase or reduction of each BIN’s qualified basis.

C. Qualifying Households

Applicants for low-income units should be advised early in their initial visit to the project that there are maximum income limits which apply for these units. Management should explain to the tenants that the anticipated income of all persons expecting to occupy the unit must be verified and included on a Tenant Income Certification (TIC) prior to occupancy, and re-certified. Applicants should be informed of other IRS requirements such as the Student Rule and Recertifications.

Unborn ChildrenIn accordance with the HUD Handbook 4350.3, owner shall include unborn children in determining household size and applicable income limits. If permitted by state laws, owner shall require documentation of pregnancy in such circumstances.

Student HouseholdsIn accordance with the Internal Revenue Code, a household comprised entirely of full-time students may not be counted as a qualified household, unless the household meets at least one exception. Refer to the Internal Revenue Code for additional guidelines on the exceptions.

Owner shall utilize a lease provision requiring tenants to notify managing agent of any change in student status.

Calculating Anticipated Tenant IncomeOwner shall qualify tenants by calculating household income using the gross income the household anticipates it will receive in the 12-month period following the effective date of the initial certification or Recertification. Anticipated income should be documented in the tenant file by third party verification whenever possible, or by an acceptable alternate method of verification with documentation as to why third party verification was not available. Owner shall use current circumstances to project income, unless verification forms or other verifiable documentation indicate that an imminent change will occur. Owner shall refer to HUD Handbook 4350.3 REV-1 for guidance on the proper calculation and verification of income and assets per IRC regulations.


CertificationUpon acceptance of an applicant to the project, a TIC must be completed for the applicant and certified to by the applicant and the owner. The form is a legal document which, when fully executed, qualifies the applicants to live in the set-aside units in the project. The head, co-head, spouse and all household members over 18 years of age must sign the TIC.

The TIC must be executed along with the lease prior to move-in. No one may live in a unit in the project unless he is certified and under lease.

The original copy of the executed TIC form is to be retained in the applicant’s file. The TIC and the supporting documentation verifying the TIC must be kept for a minimum of six (6) years after the due date (with extensions) for filing the federal income tax return for that year. The records for the first year of the credit period, however, must be retained for at least 6 years beyond the due date (with extensions) for filing the federal income tax return for the last year of the compliance period of the building, in accordance with published IRS guidelines.

RecertificationFor 100% LIHTC set-aside projects, annual recertifications are not required after January 1, 2009. Owners must recertify households at least once on the first anniversary of their initial tenancy. Self-certification of annual income is required for subsequent years.

For projects with less than 100% LIHTC set-aside:

To ensure each unit is complying with the LIHTC income restrictions, the HHFDC requires (a) the owner to annually recertify each tenant’s income and household composition and (b) each tenant is to report certain changes in income and household composition which occur between regularly scheduled recertifications.

Each tenant’s annual recertification is to be completed within one year of last recertification. The request for recertification shall be made between 90 and 120 days before the effective date, and it must clearly state that the tenant has ten (10) calendar days in which to contact the owner to begin recertification processing. The notice must also state the days and hours available for the interview, the information the tenant should bring to the interview, and how and whom to contact to schedule the interview.

Upon reverification of the tenant’s income, the owner shall complete a new TIC, which shall be certified to by the owner or owner’s designee.

Past-Due RecertificationA recertification is considered past due if the TIC form for the tenant is not certified by tenant and owner within twelve months of the last recertification.


D. Rent and Income Limits

Projects must comply with the following procedures:

Units in the project must be rent-restricted to 30% of the imputed income limitations for each unit, based upon HUD area median incomes and size of units. Rents are imputed by bedroom size in the following manner: a unit which does not have a separate bedroom - 1 individual; and a unit with 1 or more separate bedrooms - 1.5 individuals per bedroom. The HHFDC provides rent limits for projects receiving a LIHTC allocation.

Gross rent does not include any payment for various rental assistance programs and supportive service assistance as outlined in Section 42 IRC. Gross rent must include any allowance for utilities.

HUD publishes the area median incomes for each state annually. Updated income limits must be implemented pursuant to IRS Revenue Ruling 94-57, “Taxpayers may rely on a list of income limits released by HUD until 45 days after HUD releases a new list of income limits, or until HUD’s effective date for the new list, whichever is later.” Rents may be increased accordingly as the area median income increases. IRS hold harmless policy may apply.

If the income of the tenants in a unit who have been previously verified increases above 140 percent of the applicable income limitation, the unit may continue to be counted as a low-income unit as long as the next unit of comparable or smaller size is occupied by a qualified low-income tenant, and the rent continues to be restricted for the initial unit.

E. Eviction of Tenants

Once an eligible tenant has been certified and admitted to the project, the tenant may not be displaced solely due to an increase in the tenant’s household income beyond the restricted limit.

F. Audits

The project may be subject to a management audit by the HHFDC or its Authorized Delegate annually but, at a minimum, once every three years. Notification of an audit shall be given to the owner at least 30 days prior to such audit. The results of the management audit and the recommendations for corrective action to protect and maintain the project shall be transmitted to the owner within thirty (30) days following the completion of the audit.


The purpose of the audit will be to conduct a physical inspection of the building and/or project, and, for at least 20 percent of the project’s low-income units, to inspect the units and review the low-income certifications, documentation supporting the certifications, and rent records for the tenants in those units. The audit may also consist of a review of first year tenant records, a review of the documentation supporting the Annual Report, and any other documentation necessary for the HHFDC to make a determination as to whether the project is not in compliance with Section 42 IRC and Section 235-110.8 of the Hawaii Revised Statutes.

When conducting tenant file reviews, HHFDC’s and its Authorized Delegate’s reviews shall include, but not be limited to:

- completed rental application, including certification of assets and disposal of assets, if applicable;

- tenant income certification completed for move-in and current year, including all required signatures and dates;

- income verification(s) completed and documented; - assets verified in accordance with IRC regulations;- student eligibility documentation;- lease and lease addendums completed at move-in;- utility allowance on file;- review of first year tenant records which qualified the project initially for

LIHTC.

The owner shall have a period of forty-five (45) days in which to respond to the findings of the management audit. The HHFDC shall review the owner’s response to determine the extent to which the issues raised in the management audit letter are addressed. Findings, whether corrected or not, will be reported to the IRS.

See the following Section J for information on notification to the IRS of any non-compliance found in the management audit.

G. Rural Housing Service (RHS) and Tax-exempt Bond Issue Projects

In accordance with the published IRS guidelines on compliance monitoring, an exception may be granted to RHS projects under its section 515 program and buildings or projects of which 50 percent or more of the aggregate basis is financed with the proceeds of tax-exempt bonds.

The IRC regulations allow for exception of a building from the inspection requirement if the building is financed by RHS under the section 515 program, the RHS inspects the building [under 7 CFR part 1930(C)], and the RHS and the allocating agency enter into a memorandum of understanding, or other similar arrangement, under which the RHS agrees to notify the allocating agency of the inspection results. Irrespective of the physical inspection standard selected by the allocating agency, a low-income housing project under Section 42 IRC must continue to satisfy local health, safety and building codes. A memorandum of understanding has not been executed between the HHFDC and RHS.


Annual Reports, QBTS, Compliance Monitoring Status Reports and other reports are still required of RHS projects. Although the HHFDC has allowed the use of the RD 3560-8, the form does not determine eligibility for specific LIHTC requirements. Owners need to determine whether the TIC will be used or a worksheet will be attached to RD 3560-8 to determine eligibility under the IRC. Management audits will still be conducted as indicated herein.

An owner who for some reason is not able to make any of the required certifications stated on the Annual Report or other requirements must inform the Agency immediately of such inability, as well as explain the reason for said inability.

H. Reporting Requirements

a. The LIHTC Annual Report must be submitted annually by February 1 of each year throughout the compliance/extended-use period.

b. Part II of the IRS Form 8609 must be completed by the owner and submitted with the initial Annual Report.

c. Qualified Basis Tracking Sheets are submitted at a minimum annually with LIHTC Annual Report until all set-asides are established.

d. Status Reports are submitted annually by owners with the Annual Report to document and track the continuance compliance of LIHTC units throughout the compliance/extended-use period.

e. A copy of the applicable schedule, report or model used to calculate the utility allowance, submitted annually with the Annual Report.

f. Annual submission of required tenant data in accordance with the Housing and Economic Recovery Act of 2008.

These forms must be sent in to the HHFDC or its Authorized Delegate at the address shown in Section II.

The Tenant Income Certification and LIHTC forms listed above are available from the HHFDC. Additionally, the HHFDC has data regarding HUD area median incomes, maximum rental rates, income verification information and third-party verification forms.

I. Fees

A compliance monitoring fee of $25 per unit for all units within each project shall be charged annually for administrative expenses. This fee shall be submitted with the LIHTC Annual Report for each year of the compliance/extended-use period. The HHFDC reserves the right to adjust fees due to changing circumstances annually each January 1. It will be the responsibility of the HHFDC to inform the owner of any changes in the annual compliance fee prior to the submission of fees. The compliance monitoring fee will be effective as of the Placed in Service date for the first building.


J. Non-compliance Penalties

The penalty for non-compliance with these procedures is the potential recapture of the credits awarded and interest on the amount recaptured. The IRS shall determine penalties for non-compliance.

Upon determination by the HHFDC of non-compliance with the LIHTC Program, the owner shall be notified and given forty-five (45) days to correct any discovered violations. In accordance with the IRS published guidelines on compliance monitoring, the HHFDC will be required to notify the IRS within forty-five (45) days after the end of the thirty day correction period, whether or not the non-compliance is corrected. The HHFDC will be given the opportunity on the IRS form to indicate whether the owner has corrected the non-compliance. The HHFDC may extend the correction period, up to a total of six (6) months, if it is determined by the HHFDC that good cause exists for granting such an extension. In such case, the IRS will not be notified until the end of the extended correction period.

K. Additional Use Period

After the initial 15 year compliance period of the Extended Use Period (“Additional Use Period”), the HHFDC is no longer required to report instances of non-compliance to the IRS. The Compliance during the Additional Use Period (“AU Compliance Policy”) will concentrate on enforcing the requirements of the LIHTC program through the term of the Declaration of Restrictive Covenants for Low Income Housing Credit recorded on the property.

The AU Compliance Policy is largely based on the procedures of the initial compliance period. Unless noted below, the policy and procedure for compliance during the initial compliance period shall continue to apply to the additional use period.

Effective DateThe AU Compliance Policy shall be effective on the first day after the expiration of the initial 15 year compliance period for the last building placed in service in the project. Generally, the additional use compliance period will begin on January 1 of the year after the expiration of the initial 15 year compliance period of the last building placed in service and be in effect until the end of the additional use period.

Income and Rent Set AsideOwners are subject to the Section 42 occupancy and rent restrictions required in the Declaration of Land Use Restrictive Covenants for Low-Income Housing Credits.


Student HouseholdsThe IRC student rule no longer applies during the additional use period. However, as the HHFDC wants to ensure that properties in the additional use period are not used as dormitory housing, a modified student eligibility requirement will be enforced. During the additional use period, a household comprised entirely of full time students will qualify as long as at least one member of the household is an independent student or is a student in grades Kindergarten through 12 (including home schooled minors studying course material within these grades). An independent student is defined as one who is not claimed as a dependent on his/her parent’s tax return (proof required).

Available Unit Rule / 140% RuleFor projects which include market rate units, the Available Unit Rule and the 140% Rule do not apply during the additional use period. The percentage of LIHTC units as specified in the Declaration of Restrictive Covenants for Low Income Housing Credits must be maintained throughout the additional use period.

Certification and RecertificationCertification of tenants at the time of move-in shall be required during the additional use period according to the same procedure as the compliance period.

Recertification of tenants will not be required during the additional use period. However, if any adults are added to the household, then the household must be re-certified.

Unit TransfersDuring the additional use period, unit transfers are allowed without a new income qualification. Documentation of all unit transfers that occur shall be submitted as part of the Reporting Requirements.

Reporting Requirementsa. The LIHTC Annual Report must be submitted annually by February 1 of each

year throughout the additional-use period.

b. Status Reports are submitted annually by owners with the Annual Report to document and track the continuing compliance of LIHTC units throughout the additional-use period.

Site AuditsCommencing within three years after the expiration of the Compliance Period, site audits for projects may be conducted at least once every five years. Projects that have substantial outstanding non-compliance beyond the correction period based on the findings of the most recent site audit may be subject to more frequent site audits.


Owner InspectionOwners shall conduct an annual physical inspection of each unit and common areas in the project.

Correction Period and Non-compliance Penalties Upon determination by the HHFDC of non-compliance with the LIHTC Program during the additional use period, the owner shall be notified and given forty-five (45) days to correct any discovered violations. The HHFDC may extend the correction period on a case-by-case basis, up to a total of six (6) months, if it is determined by the HHFDC that good cause exists for granting such an extension. Owners may request the HHFDC to review all outstanding non-compliance issues for a property once per calendar year after the initial correction period.

Any owner and constituent entities involved in management and ownership of a project with an unresolved finding of non-compliance beyond the initial correction period may be deemed to be Not in Good Standing by the HHFDC Finance Branch.

Owners must clear all outstanding non-compliance issues to be deemed in Good Standing with the HHFDC Finance Branch.

VII. Other

A. High Cost Area DesignationNewly constructed buildings located outside of designated Difficult to Develop Areas or Qualified Census Tracts qualify as a high cost area. The additional LIHTC available from the “basis boost” will be used to offset the high cost of construction and land throughout the state.

B. Minimum Rehabilitation RequirementMinimum rehabilitation expenditures must be the greater of the minimum rehabilitation threshold identified in Section 42 IRC or the cost of work identified by the Capital Needs Assessment attributable to address immediate repairs, replacements or upgrades.

VIII. Qualified Contracts

The Omnibus Reconciliation Act of 1989 required that all properties receiving an allocation of Housing Credits after January 1, 1990 are subject to an additional use period that extended the minimum affordability period of credit properties from 15 to 30 years. Section 42(h)(6) provides an option for owners to present a Qualified Contract (“QC”) for the acquisition of the property by a prospective buyer that agrees to purchase the property for the “qualified contract price”9. If the state agency is not able to find a buyer to purchase the building at the “qualified contract price”, the additional use period is terminated.

92 IRC Section 42 (h)(6)(E)(i)(II)2016/2017 Qualified Allocation Plan March 2016Hawaii Housing Finance and Development Corporation Page 34

Owners that elected to waive their option to request a Qualified Contract are not eligible.

After the last day of the fourteenth year of the compliance period of the last building placed in service or the last day of the last year of a multiple year allocation, an eligible owner of the project utilizing federal LIHTCs may request a QC10.

Qualified Contract Request:The legal owner must first submit a written request to the HHFDC Executive Director for consideration to present a qualified contract request (the “Request”). The Request must also include a copy of the First year 8609s showing Part II completed for all buildings placed in service.

After receiving the Request, the Corporation shall conduct a review to determine the eligibility of an owner to submit an Inquiry, by confirming the following:

1. the original owner did not waive its right to request a QC during the allocation of the LIHTC;

2. the LIHTC property meets the basic physical compliance standards that are necessary to claim credits;

3. the owner has secured waivers of any purchase option and right of first refusal connected to the property;

4. the project and owners are in compliance and all programmatic requirements and are in good standing with the HHFDC.

If after the review of the Request, the Corporation determines the Owner is not eligible to submit a Qualified Contract Request Application the Owner will be notified in writing.

The owner must correct any deficiencies noted in the recent compliance monitoring before submittal of a request for a QC.

Qualified Contract Request Application:The Owner must file a complete Qualified Contract Request Application (“QC Application”) with the HHFDC on such form(s) as the Executive Director (“Director”) may require from time to time as prescribed. The QC Application includes any documents and any additional information as may be requested by the Corporation in order to comply with the Internal Revenue Code (IRC) §42(h)(6)(F).

The QC Application shall include the Owner’s proposed QC price. The QC Application shall include a report calculating the QC price prepared by an independent certified public accountant (“QC Report”). The QC Report will list all due diligence reviewed and provide a detailed calculation of the QC price. The QC Report will include an opinion and certification that the QC price was calculated in accordance with the Internal Revenue Code §42(h)(6)(F). The certified public accountant will provide a reliance letter with regard to the report and certification of QC price in the favor of the HHFDC.

10 IRC Section 42 (h)(6)(I)2016/2017 Qualified Allocation Plan March 2016Hawaii Housing Finance and Development Corporation Page 35

1. The owner will submit the following documents as part of its Application:a. QC Report;b. QC processing fee of $150 per unit for all units;c. copies of all annual partnership tax returns;d. copies of annual audited project financial statement for all years;e. copies of loan documents for all secured debt during the compliance period;f. copies of partnership agreement (original, current and all interim amendments);g. current title report (no more than 60 days from the date of QC Application);h. a physical needs assessment for the entire project (no more than 60 days from the

date of QC Application);i. an appraisal prepared by a qualified third party appraiser for the entire project

(no more than 60 days from the date of QC Application);j. a Phase I environmental (no more than 60 days from the date of QC

Application); andk. any other documents, certifications, application forms or agreements required by

the HHFDC.

2. The Owner must make the following documents available to interested buyers such that the buyers may conduct their due diligence:a. copies of annual audited project financial statement for all years;b. copies of loan documents for all secured debt during the compliance period;c. copies of partnership agreement (original, current and all interim amendments);d. current title report (no more than 60 days old from the date of QC Application);e. a physical needs assessment for the entire project (no more than 60 days from the

date of QC Application);f. an appraisal prepared by a qualified third party appraiser for the entire project

(no more than 60 days from the QC Application); g. a Phase I environmental report (no more than 60 days from the QC Application);

andh. other relevant documents.

Other Terms:1. The Corporation may procure a third party contractor to provide services related to the

valuation, review or inspection of the property. Owners are responsible for any costs associated with contacting and procuring the third party providers.

2. The Corporation may reject a QC Application if the Owner does not provide the proper documentation, information on the required forms or pay for the items listed below.

3. The 1 year period does not start until the Owner submits a complete QC Application with all required documents to the satisfaction of the Corporation.

4. The Owner will agree to release the documents listed above to interested parties. Copies of such documents will be the responsibility of the owner.


5. The Owner also agrees to allow the HHFDC to advertise the property and the Qualified Contract price. Such advertising may include but is not limited to posting on the HHFDC website, marketing through an agent, broker or consultant and mailings to interested buyers.

6. The Corporation will not bind the Owner to submit a request and will not start the one-year period (“1YP”) defined in §42(h)(6)(I) until the Corporation receives a complete QC Application.

7. Owners may choose to cancel the QC Application at anytime during this process. However the owner will only be able to request a QC once during the entire additional use period of the project. Withdrawing the application will count as the only time an owner can request a QC Application.

8. Under IRC §42(h)(6)(E)(i)(II), the Corporation’s only obligation is to “present” to the Owner a bona fide contract signed by a prospective buyer to acquire the Owner’s project for the QC price (the “Contract”). When the Corporation presents the Contract to the Owner, regardless of when or if the Contract is fulfilled, the possibility of terminating the additional use period is removed and the project remains bound to the additional use restrictions, and shall not terminate, the additional use agreement.

9. The buyer shall submit a form of Qualified Contract to the Owner that clearly states the intent to purchase the property for the Qualified Contract price. A copy of the Qualified Contract shall be forwarded to the HHFDC by the buyer or the Owner. The Owner and the buyer are free to negotiate different transaction terms.

10. In keeping with the purpose of IRC §42, the Corporation will resolve any case of doubt or interpretation in determining the QC price, both with regard to the overall process and particular projects, in favor of the lower QC price.


Appendix 1Market Study

In accordance with Section 42 (m)(iii) of the Internal Revenue Code, the HHFDC requires a comprehensive Market Study of the housing needs of low-income individuals in the area to be served by the project by a disinterested party must be submitted as part of this application. The Market Study shall be completed at the Owner’s expense.

The Market Study shall address the following information: A statement of the competence of the market analyst. A description of the proposed site. Demographic analysis of the number of households in the market area which are income eligible

and can afford to pay the rent. Estimate of capture rates for the market areas. Geographic definition and analysis of the market area. Identification of the project including location, unit counts, income levels and target population.

Market Study must be consistent with the proposed project. Analysis of household sizes and types in the market. A description of comparable developments in the market area. Analysis of practically available rents, vacancy rates, operating expenses and turnover rates of

comparable properties in the market area. Analysis of practically available rents, vacancy rates and turnover rates of market rate properties

in the market area. Expected market absorption of the proposed rental housing, including a description of the effect

of the market area. Identification and commentary of proposed projects in the market areas. Analysis of market demand for tenants with special housing needs when applicable.

Projects that are requesting credits from eligible basis generated from a Community Service Facility as defined in Section 42 (d) (4) (C) (iii) must provide a market study that addresses the following:

A description of Services provided that improve the quality of life for community residents; The market area and demand for services provided; The applicability of service provided to the community; The affordability of the services provided persons of 60% AMGI or less.


SECTION IV

PLEASE REVIEW IF APPLYING FOR:

RENTAL HOUSING REVOLVING FUNDPROJECT AWARD PROGRAM

(PROVIDES EQUITY GAP LOANS)

- Project Award Program Overview

STATE OF HAWAIIHAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION

SECTION IV - RENTAL HOUSING REVOLVING FUND PROJECT AWARD PROGRAM OVERVIEW

IntroductionThe following is an overview of the State of Hawaii’s Rental Housing Revolving Fund Program (the “Program”). The Program guidelines, policies, and procedures were developed by the HHFDC. A complete discussion and description of the Program and the requisite procedures is available, upon request, in the Procedural Manual and Administrative Rules.

BackgroundThe Hawaii State Legislature passed Act 308, SLH 1992 creating the Rental Housing Revolving Fund Program is response to the critical shortage of affordable rental housing throughout the state. The fund was initially capitalized at $15 million, and received subsequent legislative appropriations of $123.2 million. The Program also receives, as dedicated funding, a portion of the State’s Conveyance Tax. The Program is intended to act as a flexible financing vehicle, one that encourages the production of new affordable rental housing units as well as increases the capacity of organizations to meet future housing production needs.

The Program complements existing housing programs, at the federal, state, and local level. Program funds may be used in conjunction with other financing programs offered by the HHFDC. The Program seeks proposals that leverage new and existing resources - both human and financial - to address the need for creating more affordable housing.

Program PurposeThe Program provides loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The primary goal is to assist lower income families and individuals, including homeless and special need groups, in obtaining rental housing. Priorities established include the need for new construction or substantial rehabilitation, projects which leverage funds to the greatest extent possible, projects which are maintained as affordable for more than 30 years, and projects which will repay the Program so that the monies may be invested for future rental housing projects.

DefinitionsListed below are the definitions of some of the key terms used in the Program. Additional definitions may be found in Chapter 15-311, Hawaii Administrative Rules (“HAR”), and the Procedural Manual. If you require further assistance or clarification, please contact staff.

Administrative Expenses Those expenses incurred in the administration of a Project including, but not limited to, salaries and employee benefits, utilities, supplies, accounting and audit fees, and telephone service.

Affordability For Program purposes, affordability is generally achieved when a tenant’s contribution toward rent (including utilities) is approximately 30% or less of their monthly gross income, or the unit rent (including utilities) is less than or equal to the rent established by the Program.

Consolidated Application April 1, 2016Section IV: Rental Housing Revolving Fund Project Award Program Page 1

Application A submittal requesting funds from the Program.

Cash flow Cash available after vacancy, operating expenses, reserves, and debt service payments have been deducted from gross income generated from the rental units.

ConstructionManagement Costs Costs directly related to managing the Project to the point of completion

of construction.

Consultant Fee Fees paid to a third-party developer or a consultant for costs/services associated with the implementation of a Project. This may include developer’s fee and overhead.

Corporation The Hawaii Housing Finance and Development Corporation as defined by Section 201H-1, Hawaii Revised Statutes. The Corporation is headed by the Board of Directors (the “Board”).

Debt Coverage Ratio The ratio of Net Operating Income to total annual Debt Service payments. For Projects requesting Program funds, this ratio shall not be less than 1.00 to 1.00.

Debt Service Reserve Program contract language may require a Program recipient to deposit all or a portion of the Project’s cash flow into a debt service reserve account to reduce the loan principal during or at the end of the loan term.

Develop/Development The planning, financing, acquisition of real and personal property, demolition of existing structures, clearance of real property, construction, reconstruction, alteration, or repairing of approaches, streets, sidewalks, utilities, and services, or other site improvements, or construction, reconstruction, repair, remodeling, extension, equipment, or furnishing of buildings or other structures, or any combination of the foregoing, of any housing project. It also includes any and all undertakings necessary therefore, and the acquisition of any housing, in whole or in part.

Eligible Applicants Eligible applicants include non-profit entities, private developers, government agencies, LLC’s and Partnerships. One or more eligible entities that submit an Application to the Corporation requesting funds from the Program.

Equity Gap Financing Additional funds required to make a Project financially feasible, usually cash or subordinated debt used to fill the “gap” between available financing, available subsidies, and total development cost.

Housing/Housing Project/Project A plan, design, or undertaking for the development of dwelling units, and

includes all real and personal property, buildings and improvements, commercial space, lands for farming and gardening, community facilities acquired or constructed or to be acquired or constructed, and all tangible or intangible assets held or used in connection with the housing project.

Leverage Ratio The ratio of total project dollars from other sources benefiting low- to moderate-income households to the total Fund dollars requested.


Loan Funds lent to an Eligible Applicant for the purpose of financing a qualified housing project located within the State of Hawaii with the obligation to repay the funds according to specific terms and conditions as set by the Corporation.

Loan to Value Ratio The ratio of the total loan amount to the total appraised value. The maximum loan-to-value authorized by the Fund is 100 percent.

Nonprofit Organization A corporation, association, or other duly chartered entity which is registered with the State, and which has received a written determination from the Internal Revenue Service that is exempt under either section 501(c)(3), section 501(c)(4), or so much of section 501(c)(2) as applies to title holding corporations that turn over their income to organizations that are exempt under either section 501(c)(3) or 501(c)(4), of the Internal Revenue Code of 1986, as amended.

Regulatory Agreement/ Restrictive Covenants The agreement between the Corporation and the Applicant receiving

Program funds that prescribes the manner in which a Project is to be operated, the rental rates to be charged, and the conditions under which distributions may be made from the Project to the Applicant.

Relocation Expenses Those costs paid to households when relocation is necessary.

Special Needs Housing Groups of people who require special housing-related services. (Note: If an Applicant states that a special needs population will be served/targeted, the Corporation will expect to see appropriate services described as part of the Application and design.)

Minimum Affordability CriteriaQualified Projects funded in whole or in part from the Rental Housing Revolving Fund will be ranked in the following order of priority:

1. Projects awarded tax credits or financing administered by HUD or USDA RD maintaining a minimum of:

50% of the units for families or households earning 80% or less of the area median gross income, of which 5% of the units for families or households earning 30% or less of the area median gross income.

and the remainder of the units for families or households earning 100% or less of the area median gross income.

2. Mixed income rental projects or units in a mixed-income rental project where all units are for persons and families with incomes below 140% area median gross income.

Median gross income figures are derived annually from figures issued by HUD. Additionally, Program funds must be used for affordable rental housing projects.


Eligible ActivitiesAs set forth in Chapter 15-311, HAR, activities eligible for assistance include, but are not limited to, the following areas:

• Planning;• Design;• Land acquisition;• Cost(s) of options;• Agreement(s) of sale;• Downpayments;• Equity financing, including the leveraging of moneys with the use of fund assets;• New construction or rehabilitation;• Acquisition of housing units for the purpose of preservation as lower cost housing;• Participation in interim construction loans provided by private lenders or in loan programs

administered by government agencies;• Capacity building grants to nonprofit organizations;• Pre-Development grants or loans to nonprofit organizations or governmental agencies;• Other housing development services or activities as approved by the HHFDC on a case-by-

case basis.

Project Administrative ExpensesAs codified in Chapter 15-311, section 23, HAR, program funds cannot be used to finance the day-to-day administrative expenses of a project.

The ApplicationThe Application requires detailed and comprehensive descriptions and justifications for the proposed activities.

The key to a successful application is a clear description of the Local Housing Need; the Project and its Design; the Benefits and Impacts; the Management of Project; and the degree to which the applicant is able to leverage limited resources.

EvaluationAfter reviewing staff’s findings, the HHFDC evaluates each project based on the five (5) elements that comprise the Rating Criteria. These broad criteria are based on statutory language contained in the enabling legislation and are translated into the specific rating criteria. The actual criteria and the corresponding point values are described below in the section labeled “Rating Criteria”. It is important to note that the form of assistance requested (i.e., deferred loan, amortized, interest-only, or grant) is not part of the rating criteria.

The evaluation process favors proposals that demonstrate the following characteristics:

• Projects that serve the target groups as specified in §201H-202(e)(1) and (2) of the Hawaii Revised statutes;

• Projects which provide at least five percent of the total number of units for persons and families at or below thirty percent of the median family income;

• Projects which the maximum number of units for families with income at or below eighty percent of the median family income;

• Projects which provide the maximum number of units for least amount of subsidy;• Projects which are committed to serving the original target population over a longer period of

time;• Projects which increase the integration of income levels of the immediate community area;• Projects which meet the geographic needs of the target population (e.g., proximity to

employment centers and services);• Projects being developed by applicants with a favorable past performance in developing,

owning, managing, or maintaining affordable rental housing;; and


• Other criteria established by HHFDC that is deemed necessary to carry out the intended purposes of the fund.

For all funding requests, in order to be considered by the HHFDC the applicant’s project must produce units in at least one of the following categories:

• Multi-family projects;• Attached single-family units;• Apartments;• Townhouses;• Housing units above commercial or industrial space;• Single room occupancy units;• Accessory apartment units;• Employee housing; • U.S. Department of Housing and Urban Development mixed finance development of public

housing units; and• Other types of units, as determined by the Corporation, meeting the eligibility criteria.

Staff or the HHFDC retains the right to contact local government officials, representatives of other funding programs, or other individuals to verify or obtain additional information about applicant’s proposals.

Rating CriteriaEach application is evaluated and awarded points in accordance with the criteria listed below. The Corporation may accept a request, may deny a request, or may delay action on any request for project funds.

A minimum of 125 points (out of the 250 total points) must be scored in order to be placed on the Eligible Project List by the Corporation.

A more detailed listing of the scoring criteria is available from staff, upon written request for such information.

1. Local Housing Needa. Increase the integration of income

levels of the immediate community area 0 - 10 pointsb. Supported by local county government

as evidenced by a letter of support. 0 - 10 pointsc. Clearly describes the shortage and demand for

low-income units in the proposed area. 0 - 10 pointsd. Project will add new low-income units

to the State’s inventory (i.e., new construction or substantialrehabilitation) 0 - 25 points

55 Points

2. Project Description and Designa. The project characteristics address the

health and safety of tenants and providesamenities to enhance the project. 0 - 10 points

10 Points


3. Benefits and Impacta. Services the original target group (i.e.,

at least 50% of units serving individuals earning 80% or less of HUD median income, of which at least 5% of units serving individuals earning 30% or less of HUD median income, and the remainder of units serving individuals earning 100% or less of HUD median) or mixed income project rentals where in all of the available units are for persons and families with incomes at or below 140% AMGI. 0 - 10 points

b. Committed to serving the original targetpopulation for a longer period of time. 0 - 35 points

c. Provides units for special needs groups. 0 - 10 pointsd. Provide units with two bedroom

units or larger 0 - 10 pointse. Project will charge rent for units that is

less than the maximum allowed under the Program. 0 - 20 points

85 Points

4. Project Managementa. Applicant and/or project development team

demonstrates the experience and theability to successfully implement theproposed project in a timely and on-going manner. 0 - 10 points

b. Applicant is a non-profit or affiliatedwith a non-profit entity. 0 - 10 points

c. Project has low developer fees and overhead. 0 - 10 points

d. Applicant presents a reasonable developmentbudget, sources and uses statement,and operating pro forma for the project. 0 - 10 points

40 Points

5. Leveragea. Provides maximum number of units for the

least amount of Program subsidy 0 - 20 pointsb. Has secured commitments of other resources,

including private funds, public funds,and recipient contributions. 0 - 10 points

c. Project provides maximum amount of leverage (total state funds vs. other funds). 0 - 20 points

d. Development schedule demonstrates areasonable time frame. 0 - 10 points

60 Points

TOTAL POINTS 250


Loan Awards

Only those Applications that best meet the statutory intent and the criteria of the Program will be selected to receive Program funds.

The Corporation has the authority and the right to approve, disapprove or defer decisions regarding any application or project for funding awards, regardless of the ranking under the Rating Criteria. The Corporation or its designated representative has the authority to make such decisions if it is deemed to be in the best interest of meeting state housing needs. The Corporation reserves the right to make an award for less than the amount requested by the Applicant. The Corporation reserves the right to accept or reject any Application, to award loans to as many or as few Applicants as it may select, to award loans to entities other than Applicants. The Corporation reserves the right to cancel, suspend or terminate, in part or in whole, any funding round, if the Corporation, in its sole discretion, deems it to be in its best interest to do so. The Corporation reserves the right to reject any Application submitted and may exercise such right without notice and without liability to any Applicant or other parties for their expenses incurred in the preparation of an Application. Applications are prepared at the sole risk and expense of the Applicant. The completion, receipt, or acceptance of an Application does not commit the Corporation to pay any costs incurred in preparation of the Application. The Corporation shall not be responsible for any costs incurred by the Applicant due to the cancellation, suspension, or termination of such funding round, or the rejection of any Application.

The awarding of funds is subject to the availability of funds and approval by the Governor of the State of Hawaii.

Revolving Fund ContractAfter an application is selected for funding by the Corporation, several legal documents will be negotiated and executed between the applicant and the Corporation. The type of documentation and the form of documentation will depend upon the form of financing (i.e., grant, loan, or combination) provided by the Corporation.

At a minimum all award recipients will be required to execute a Regulatory Agreement/Restrictive Covenant between the applicant and the Corporation. The Regulatory Agreement/Restrictive Covenant will set out the terms and conditions that will be the basis for the applicant to operate the project for the duration of the commitment. Included in the agreement will be items such as rental rates, increases in rental rates, and other related topics. The final form of the agreement is determined by the type of funding award and by the specific terms and conditions negotiated between the Corporation and the applicant.

Compliance Monitoring and Follow-upStaff monitors the expenditures and the activities associated with each project receiving Program funds. Participants may be required, subject to the Corporation’s determination, to report the status of their projects on a monthly, a quarterly, or an annual basis, depending upon the nature of the project.

Staff monitors each project to ensure that the project complies with the terms of the Program Contract and to insure that Program monies are spent efficiently and for their intended purposes.


Consolidated Application Forms

Exhibit 8 and 9 – Housing Development Experience worksheet

Exhibit 22 – Environmental Questionnaire

Exhibit 24c – Market Analyst Affidavit

Exhibit 24d – Applicant Affidavit

Exhibit 34 – Letter to Local Public Housing Authority

Exhibit 35 – Letter to State of Hawaii, Department of Human Services Homeless Programs Office

Consolidated Application April 1, 2016

Exhibit 8 and 9 Housing Development ExperienceName: Page 1 of 1

Copy format and add pages as needed

Number of Units

Name of Property, Address

Capacity of Applicant/ Developer

Type of Project

City, State Affordable Market

Financing/ Subsidy Program Utilized Status of Project

Ex

XYZ Towers LP fka XYZ Towers 16000 SW XYZ Lane Nowhere, HI

Developer/ General Partner

Family Mixed-use Mixed Income

Nowhere, HI

50@40% 100@60%

120 T/E Bonds LIHTC

Operating for 20 years

1

2

3

4

5

6

7

8


HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATIONENVIRONMENTAL QUESTIONNAIRE(TO BE COMPLETED BY APPLICANT)

The purpose of this questionnaire is to identify environmental issues to the Hawaii Housing Finance and Development Corporation (HHFDC), related to the real estate collateral or related to the operations onsite, either past or present. This information will be considered as part of the financing application. Please answer all questions. If the site has operations or improvements which are not residential, retail or office uses, additional reports or attachment forms may be required. This questionnaire is a transmittal and informational document and is to be signed by the applicant.

Applicant

Project:

Project Address:

LAND USE/OWNERSHIP

1. Current property owner, if different from the applicant:

2. Current and past site use(s): (Please check appropriate box)

Multi-family residential Office Retail

Warehouse Restaurant Vacant

Manufacturing

Other:

If manufacturing or other, describe specific business activity:

3. Current zoning of property:

Are any land use changes intended? Yes No

If yes, to what use?

ENVIRONMENTAL QUESTIONNAIRE 1 April 1, 2016

4. Is site contiguous to any lakes, rivers or a coastal zone or located on either a former or current wetland area or endangered species habitat? Yes No

If yes, describe:

5. If the site is residential, provide a copy of any standard tenant environmental notification/disclosure. Check box if attached

6. If the site is not residential and is not entirely owner-occupied, or has tenants, please attach a current tenant list, including a description of the services or operations performed by each. Check box, if attached

UNDERGROUND STORAGE TANKS

1. Has there ever been or is there currently a gas station or underground storage tanks (USTs) of any sort located on the site?Yes No

If yes, when and for how long?

2. If yes, describe ownership and identify the operator of the gas station or USTs:

3. If yes, attach any environmental investigation reports that reflect conditions of the current of former USTs. Check box if attached

DRY CLEANERS

1. Has any dry cleaner operation been or is one currently located onsite?Yes No

If yes, when and for how long?

2. If yes, what type of dry cleaning unit is current in use?Transfer Dry to Dry

Other (please specify):

How old is current equipment? Years.

Primary cleaning solvent and quantity used? gallons/mo.

How is the solvent disposed? (Describe the waste handling and disposal procedures):


BUILDING IMPROVEMENTS

1. Were any improvements constructed prior to 1981? Yes No

If yes, describe type of building, square footage, and construction date(s):

2. For any of the buildings constructed prior to 1981, has there been any major internal renovation work performed since 1981?Yes No Do Not Know

If yes, describe:

3. Are any improvements on the property known to contain asbestos?Yes No Do Not Know

If yes, attach any available survey or the test result documentation; check box, if attached

4. Are any electrical transformers, capacitors, or other equipment, not owned by a utility, but which may contain PCBs, present on the site?Yes No

If yes, attach any survey or test result; check box, if attached

5. Do any improvements onsite include hydraulic hoists or elevator?Yes No

If yes, describe:

6. What is the source of water supply for the site?Public On-site drinking well On-site irrigation well Other (describe):

7. What are the destinations of wastewater and surface drainage discharge?Storm sewer Dry well Sanitary sewer Septic

Leach Field Above-ground tank Underground tank Vats

Ditches or Bodies of Water Sumps Clarifiers

Trenches Ponds Wetlands

Treatment Systems (describe):

Other (describe):

8. Attach copies of any wastewater treatment and/or wastewater or storm water (non-point source) discharge permits pertaining to the property. Check box, if attached


REGULATORY ACTIONS

1. Have there been any spills, leaks, or other reportable releases of chemicals on the property or migration of chemicals onto the property from an off-site source? Yes No

If yes, describe the chemicals and quantities released, any cleanup measures taken and the results of any related air, soil, or groundwater investigations:

2. Is the site adjacent to or within 2,000 feet of a governmental agency listed toxic waste treatment or disposal site, landfill, or contaminated drinking water well? Yes No

If yes, explain:

3. Has any public agency ever investigated or cited the property for violation or possible violation of any environmental law, or any third party including a public agency, commenced enforcement or cleanup action under environmental law with respect to the property? Yes No

If yes, describe:

4. Has any public agency ever listed the property as a waste disposal site or a site potentially qualifying for cleanup under any environmental law? Yes No

If yes, describe:

5. Has the applicant or any of its partners, joint venture(s), corporate officers, or guarantors ever been named in any governmental or private injunctive, preventive or other administrative proceedings, actions, or litigations involving hazardous waste, toxic substances, hazardous materials, or any other environmental issues? Yes No

If yes, attach an explanation. Check box, if attached .


INSURANCE/INDEMNIFICATION ARRANGEMENTS

1. Does the property owner have any form of either environmental or pollution insurance or other coverage under an indemnification agreement? Yes No

If yes, describe or attach the indemnification. Check box, if attached .

2. Does the insurance or indemnification agreement cover environmental damages to the property caused by tenants? Yes No Not applicable

3. Do tenants have insurance to cover environmental impairment? Yes No Not applicable .

If yes, attach a copy of the relevant lease clause and/or binder and describe the conditions and limits of the coverage. Check box, if attached .

4. If petroleum USTs are onsite, is the owner eligible for reimbursement of cleanup costs from a state cleanup fund? Yes No

If not eligible, describe the form of financial assurance (cash, bonds, insurance) that is provided to comply with federal regulations

EXISTING ENVIRONMENTAL INVESTIGATION REPORTS

Attach any environmental site assessment(s), audits, investigations, or asbestos/lead surveys, or disclosures that are available to you. Check box, if attached .

[The remainder of this page is blank. The next page is a signature page.]


If applicant is an individual:

I, , state to the best of my knowledge, information(print name)

and belief that all of the facts stated in response to the questions and requests for information contained

in the foregoing Environmental Questionnaire are true.

Signature Date

If applicant is a corporation, partnership, or limited liability company:

I, , state that I am the (print name) (title or position)

of (Applicant) and that(applicant’s name)

I am authorized to execute this document on behalf of Applicant. I further state based in part upon my

personal knowledge and in part on the business records of the Applicant, that to the best of my

knowledge, information and belief that all of the facts stated in response to the questions and requests

for information contained in the foregoing Environmental Questionnaire are true.

Signature Date

Corporate Title


AFFIDAVIT(Market Analyst for HHFDC Consolidated Application)

This Affidavit is duly made this day of , 20 ,

by , the (name of officer) (title)

of , a Hawaii ,(market analyst) (type of business)

whose principal place of business is (street address)

and whose post office address is .

certifies that (name of officer) (market analyst)

has conducted a market analysis for (name of developer/applicant)

on the project, located at(name of project)

,(project address)

Tax Map Key .

certifies and confirms that (name of officer)

is not affiliated with, and does(market analyst)

not have any self-dealings, related parties, or identity of interest with

except as noted on an attachment hereto.(developer/applicant)

IN WITNESS WHEREOF, (name of officer)

has caused this Affidavit to be signed as of the day and year first written above.

(Market Analyst)

By:(signature)

Its(title)


STATE OF )

) SS

CITY AND COUNTY OF )

On this of , 20 , before me

personally appeared ,

to me known to be the person described in and who executed the foregoing instrument and acknowledged

that he/she executed the same as his/her free act and deed.

(Notary Stamp or Seal) (Signature)

(Print Name)

Notary Public, State of

My commission expires:

Doc. Date: # Pages:

(Notary Stamp or Seal)

Notary Name: Circuit

Doc. Description:

Notary Signature DateN O T A R Y C E R T I F I C A T I O N


AFFIDAVIT(Owner/Developer of HHFDC Consolidated Application)

This Affidavit is duly made this day of , 20 ,

by , the (name of officer) (title)

of , a Hawaii ,(developer/applicant) (type of business)

whose principal place of business is (street address)

and whose post office address is .

certifies that (name of officer) (market analyst)

has conducted a market analysis for (name of developer/applicant)

on the project, located at(name of project)

,(project address)

Tax Map Key .

certifies and confirms that (name of officer)

is not affiliated with, and does(developer/applicant)

not have any self-dealings, related parties, or identity of interest with

except as noted on an attachment hereto.(market analyst)

IN WITNESS WHEREOF, (name of officer)

has caused this Affidavit to be signed as of the day and year first written above.

(Developer/Applicant)

By:(signature)

Its(title)


STATE OF )

) SS

CITY AND COUNTY OF )

On this of , 20 , before me

personally appeared ,

to me known to be the person described in and who executed the foregoing instrument and acknowledged

that he/she executed the same as his/her free act and deed.

(Notary Stamp or Seal) (Signature)

(Print Name)

Notary Public, State of

My commission expires:

Doc. Date: # Pages:

(Notary Stamp or Seal)

Notary Name: Circuit

Doc. Description:

Notary Signature DateN O T A R Y C E R T I F I C A T I O N


SAMPLE FORM LETTER – LETTER IS REQUIRED PLEASE PRINT ON LETTERHEAD

(Date)

Executive DirectorHawaii Public Housing Authority1002 N. School StreetHonolulu, Hawaii 96817

Dear Executive Director:

Re: Proposed Low Income Housing Tax Credit Project

The undersigned has applied for Low Income Housing Tax Credits (LIHTC) for the development of an affordable housing project. All low-income units in the proposed project will be available to people on the waiting list for low income public housing.

A summary of the proposed project follows:

Project Name:

Location:

No. of Affordable Units:

Occupancy Type:ElderlyFamilyHomelessTenants with Special Housing Needs

If awarded LIHTC, the undersigned will provide a full description of the project.

Sincerely,

(Name)(Title)


SAMPLE FORM LETTERPLEASE PRINT ON LETTERHEAD

(Date)

AdministratorHomeless Programs OfficeDepartment of Human ServicesBenefits, Employment & Support Services Division820 Mililani Street, Suite 606Honolulu, Hawaii 96813

Dear Homeless Programs Administrator:

Re: Proposed Low Income Housing Tax Credit Project

The undersigned has applied for Low Income Housing Tax Credits for the development of the proposed Enter Project Name. All low-income units in the proposed Project will be available to people in an acceptable shelter program.

A summary of the proposed project follows:

Project Name:

Location:

No. of Affordable Units:

Occupancy Type:ElderlyFamilyHomelessTenants with Special Housing Needs

If awarded LIHTC, the undersigned will provide a full description of the project.

Sincerely,

(Name)(Title)
